Prominent value investor of Canada-based Chou Associates Management Francis Chou (Trades, Portfolio) announced Monday that he purchased two new holdings in the first quarter: Sears Holdings Corp (SHLD.WS, Financial) and Ascent Capital Group Inc. (ASCMA, Financial).
In his annual letter covering the year 2014, the price-conscious Chou said that he is having a guarded approach to markets.
“In 1981, I felt the economic conditions were such that you were set up for a huge success. You just needed the courage to load up the truck and buy everything in sight. By contrast current conditions make me feel that investors are being set up for a heartbreaking disappointment, especially for the unwary.”
The New Holdings
Sears Holdings Corp (SHLD.WS, Financial)
Chou purchased 581 Sears Holdings warrants, a miniscule position worth less than 0.01% of his portfolio.
Sears Holdings (SHLD, Financial) stock comprises 9.78% of his portfolio, at 896,088 shares. He commented on the company in his shareholder letter:
“As we have indicated before, we believe that Sears Holdings (SHLD) is a misunderstood story. There are many moving parts but we believe Sears Holdings’ intrinsic value lies in its real estate assets. It also has other valuable assets such as Kenmore, Craftsman and Diehard. Being a traditional department store has become a tough business during the last decade but, according to management, Sears is transitioning its historic focus on running a brick and mortar department store into a business that provides and delivers value by serving its members in the manner most convenient for them: whether in store, at home or through digital devices.” Continue reading here.
Ascent Capital Group Inc. (ASCMA, Financial)
Chou purchased 140,000 shares of Ascent Capital Group Inc., a 1.47% portfolio weight. The company’s share price averaged $44 for the first quarter.
Ascent Capital Group Inc. is a holding company incorporated in Delaware on May 29, 2008. Ascent Capital Group Inc. has a market cap of $541.55 million; its shares were traded at around $41.14 with and P/S ratio of 1.0.
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