BlackBerry Ltd (BBRY), Resolute Forest Products Inc (RFP), SandRidge Energy Inc. (SD): Fairfax’s Top 3 Picks Account for Almost Half Its Equity Portfolio’s Value

Fairfax Financial Holdings, the hedge fund founded and managed by Prem Watsa, recently made public its long equity holdings for the second quarter of 2014. The portfolio, worth more than $1.46 billion, saw 5 new stocks arrive over the period, and another 5 positions closed out. In this article we will take a look at the fund´s top holdings for the quarter, which remained the same as in the first quarter.

For the third consecutive quarter, the fund placed its largest bet on Resolute Forest Products Inc (NYSE:RFP), a $1.6 billion market cap owner and operator of pulp and paper mills and wood products facilities in the United States, Canada and South Korea, and power generation assets in Canada. Despite the fact that Fairfax kept its stake unchanged over the quarter, the position lost value, as the stock price plunged about 10.6% between April and June. The fund disclosed ownership of 29 million shares of Resolute Forest Products Inc (NYSE:RFP), worth almost half a billion dollars. This position accounts for approximately 1/3 of its equity portfolio’s total market value, and makes Fairfax the largest hedge fund shareholder of record (amongst those we track) at the company.

Prem Watsa

Another major hedge fund that acknowledged holding a big chunk of Resolute Forest Products Inc (NYSE:RFP)’s stock is Francis Chou’s Chou Associates Management, which kept its stake unchanged over the second quarter, at 4.11 million shares, worth more than $73 million.

Second in line is BlackBerry Ltd (NADSAQ:BBRY), the $5 billion market cap designer, manufacturer and marketer of wireless solutions for the mobile communications market. Fairfax declared ownership of 46.65 million shares of the company, worth roughly $477 million, up from $376 million by the end of the first quarter. BlackBerry Ltd (NADSAQ:BBRY)’s stock returned 21.7% over the second quarter, and 27% year-to-date. However, it still trades at 1.3 times the company’s sales, at half it’s peers’ average valuation.

Once again, Mr. Watsa is the largest hedge fund shareholder of record at the company. Another fund that disclosed no changes in its position, and ranks amongst BlackBerry Ltd (NADSAQ:BBRY)’s top ten hedge fund investors, is Fang Zheng’s Keywise Capital Management, which owns 3.6 million shares of the company, worth almost $37 million.

Last in this list is SandRidge Energy Inc. (NYSE:SD), a $2.6 billion market cap oil and natural gas company engaged in exploration, development and production activities in the Mid Continent, Gulf of Mexico and Gulf Coast. Similar to BlackBerry Ltd (NADSAQ:BBRY)’s case, SandRidge Energy Inc. (NYSE:SD)’s stock gained 14% over the second quarter of the year, making the Fairfax’s stake worth more than $232 million. However, the stock price has plummeted over the past month, losing more than 20%, largely affecting the fund’s returns for the third quarter of the year.

Leon Cooperman’s Omega Advisors also saw its stake in SandRidge Energy Inc. (NYSE:SD) gain value over the second quarter of the year. However, the fund sold almost 1 million shares over the period, profiting from the price increase, and slightly diminishing the impact of the recent stock price fall. Omega Advisors last disclosed ownership of 46.78 million shares of the company, worth approximately $334 million. However, at current stock prices, the position is worth only $243 million.

Disclosure: Javier Hasse holds no position in any stocks or funds mentioned.

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

The 10 Cheapest Places to Retire Abroad

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!