During the second half of 2015, the Chou RRSP Fund (Trades, Portfolio) led by Francis Chou (Trades, Portfolio) purchased only one new holding of 348,000 shares in Canadian Oil Sands Ltd. (TSX:COS, Financial) for an average price of C$9.05 per share.
This is the first time Chou has purchased an oil company according to Real Time Picks data going back to 2009.
On March 21, Suncor Energy completed its acquisition of Canadian Oil Sands and, based on the closing price of the shares that day, implied an acquisition price of C$10.17 per share. Canadian Oil Sands shares were delisted from the Toronto Stock Exchange on March 23. Chou will receive 0.28 of a Suncor share for each of his Canadian Oil Sands shares.
Suncor Energy (TSX:SU, Financial) focuses on developing petroleum resource basins in Canada’s Athabasca oil sands. The stock traded down by 6% over the past year and is up 3% year to date.
For fiscal 2015, Suncor reported its first year in the red in the past 15 years, with losses per diluted share of C$1.38. Losses were driven by low crude oil prices. Suncor had EPS of C$1.84 the year before.
The company’s upstream production increased to 582,900 barrels per day during the fourth quarter while cash operating costs per barrel declined due to lower costs and natural gas prices. Production in E&P declined in part due to production disruptions in Libya because of political unrest.
The fund was down 12.8% in Canadian dollars for the full year 2015, underperforming the S&P/TSX Total Return Index, which was down 8.3%. The fund noted that weakness in the Canadian dollar relative to the U.S. dollar had a positive impact on its results.
Though Chou does not often invest in oil and gas companies, he has notable investments in other commodities, including large stakes in forest products — Canfor Pulp Products (TSX:CFX, Financial), Resolute Forest Products (TSX:RFP, Financial) and Interfor Corp. (TSX:IFP, Financial). Those three positions account for more than 34% of Chou’s portfolio of 17 stocks.
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