10 Stocks to Buy According to Francis Chou’s Chou Associates Management

Published July 28, 2022 at 9:04 am EDT Updated August 19, 2026 at 8:07 am EDT

In this article, we discuss 10 stocks to buy according to Francis Chou’s Chou Associates Management.

Francis Chou was originally an immigrant in Canada. He is now a well-known Canadian value investor and the founder of Chou Associates Management. Although he was born and raised in India, Chou is Chinese and just relocated to Canada in quest of work. He found a job at Bell Canada as a telephone repairman. He got acquainted with Benjamin Graham’s novels at that time. With $51,000, Chou founded an investing club in 1981, together with six of his colleagues’ telephone repairers. In 1984, he left Bell Canada to work as a retail analyst at GW Asset Management, where he met Prem Watsa, who later became the CEO of Fairfax.

Chou Associates Fund was established in 1986, and since then, it has only had 8 years of losses, with an average annual return of 10.4%. The fund has increased by 6.43% annually over the previous 15 years, while the S&P 500 index rose by 6.8% over the same period. The fund’s average annual return over the last ten years was 6.44%, while the S&P 500 had a 10.6% increase. In contrast to the S&P 500’s average annual return of 13.5% over five years, Chou Associated produced an average yearly return of 4.98%.

Chou goes above and beyond to ensure the success of the firms he is engaged with. He wants to transform Wintaai Holdings, a wholly-owned subsidiary of Chou Associates Management, into a gigantic conglomerate akin to Berkshire Hathaway, drawing inspiration from Warren Buffett. He also acts as Wintaai’s CEO, albeit he doesn’t get compensation for that role.

Chou Associates Management manages assets for several Canadian individuals and businesses. This entails thoroughly examining each company’s advantages, with a lot less focus placed on current market conditions. Instead, an evaluation of a company’s financials, cash flow patterns, profitability, industry position, unique qualities, the potential for future growth, and managerial skills are given far more weight than other factors. The hedge fund’s Q1 portfolio was worth $187.96 million. Some of the most notable stocks in Chou Associates Management’s Q1 2022 portfolio included JPMorgan Chase & Co. (NYSE:JPM), Bausch Health Companies Inc. (NYSE:BHC), and Wells Fargo & Company (NYSE:WFC).

10 Stocks to Buy According to Francis Chou's Chou Associates Management

Francis Chou of Chou Associates Management

Our Methodology

Let’s start our list of 10 stocks to buy according to Francis Chou’s Chou Associates Management. We picked these stocks from the first quarter portfolio of Chou Associates Management.

Stocks to Buy According to Francis Chou’s Chou Associates Management

10. Wells Fargo & Company (NYSE:WFC)

Chou Associates Management’s Stake Value: $947,000

Percentage of Chou Associates Management’s Portfolio: 0.5%

Number of Hedge Fund Holders: 93

Wells Fargo & Company is a diversified financial services company. On July 17, Barclays analyst Jason Goldberg maintained an Overweight rating on the shares of Wells Fargo and decreased his price objective for the stock to $58 from $64 following the Q2 report.

On July 15, Wells Fargo & Company reported earnings for the second quarter, posting earnings per share of $0.74, compared to earnings per share of $0.88 for the first quarter of 2022. The quarterly revenue was down 16% from the prior year quarter, amounting to $17.03 billion, missing estimates by $510 million.

In the first quarter of 2022, Francis Chou’s Chou Associates Management held 19,542 shares of Wells Fargo & Company, which amounted to $947,000. Wells Fargo & Company occupied 0.5% of the hedge fund’s total portfolio.

Patrick Degorce’s Theleme Partners held a notable stake in Wells Fargo & Company at the end of the first quarter of 2022, equaling $884.72 million. Insider Monkey spotted 93 hedge funds that were long Wells Fargo & Company at the end of Q1 2022. The collective stakes of these hedge funds totalled $6.86 billion, compared to $6.12 billion a quarter ago with 94 positions.

Davis Funds mentioned Wells Fargo & Company in its fourth-quarter 2021 investor letter. Here is what the fund said:

“The absolute level of revenues and profits generated by such companies is in fact so large that most of the major financial holdings in the portfolio produce enough annual operating income individually that a number of them could, in theory, purchase several entire businesses among hundreds of choices within the S&P 1500 Index, using just a year’s cash earnings without dipping into capital. This is theoretical, as financial companies would not be in the business of buying healthcare or technology companies, for example, but we point out these facts to illustrate the sheer scale of the economics produced by single financial companies in a given year, which is often a multiple of the cash earnings yielded by companies in a host of other industries.

Given this cash-generation power, we are naturally drawn to what we believe are strong and profitable financial institutions when the price is right. Presently, we believe the valuations of our financial holdings are not only reasonable, but extremely compelling, and our portfolio composition reflects this view. Representative financial holdings in the Fund includes Wells Fargo.”

9. Magna International Inc. (NYSE:MGA)

Chou Associates Management’s Stake Value: $1,286,000

Percentage of Chou Associates Management’s Portfolio: 0.68%

Number of Hedge Fund Holders: 26

Magna International Inc. (NYSE:MGA) is a body exterior, structures, power, vision, and seat-focused mobility tech firm and vehicle supplier. D E Shaw is Magna International Inc.’s largest shareholder, with shares worth $42.42 million.

Morgan Stanley’s analyst Adam Jonas maintained an Overweight rating on Magna International Inc. on July 14 and decreased his price objective from $84 to $79. Morgan Stanley cut its forecast for the automobile industry to account for weaker growth and credit concerns.

The hedge fund began building its stake in the company in the fourth quarter of 2018. In the first quarter of 2022, it held 20,000 shares of Magna International Inc.. These were worth $1.29 million and accounted for 0.68% of its portfolio. Magna International Inc. is the ninth-largest holding of Francis Chou’s Chou Associates Management.

According to Insider Monkey’s Q1 data, 26 hedge funds were bullish on Magna International Inc., with combined stakes of $171.93 million, compared to 28 funds in the earlier quarter, holding stakes in the company valued at $477.07 million.

Like JPMorgan Chase & Co., Bausch Health Companies Inc., and Wells Fargo & Company, elite hedge funds are monitoring Magna International Inc..

8. The Goldman Sachs Group, Inc. (NYSE:GS)

Chou Associates Management’s Stake Value: $2,344,000

Percentage of Chou Associates Management’s Portfolio: 1.24%

Number of Hedge Fund Holders: 71

The Goldman Sachs Group, Inc. (NYSE:GS) offers various financial services to businesses, financial institutions, governments, and private citizens worldwide. In the first quarter of 2022, Chou Associates Management owned 7,100 shares of The Goldman Sachs Group, Inc., worth $2.34 million. This represented 1.24% of the investment portfolio of the hedge fund.

On July 12, Citi analyst Keith Horowitz reiterated a Buy rating on The Goldman Sachs Group, Inc. while trimming his price target to $360 from $400. To account for the losses from the Federal Reserve stress test, which he judged to be a reasonable measure of underlying risk on bank balance sheets, the analyst updated U.S. bank models ahead of Q2 results and decreased price expectations.

Among the hedge funds tracked by Insider Monkey, 71 funds were long The Goldman Sachs Group, Inc. in the first quarter of 2022, down from 75 funds in the previous quarter. Boykin Curry’s Eagle Capital Management is the biggest shareholder of The Goldman Sachs Group, Inc., with 3.41 million shares worth $1.13 billion.

Ariel Investments mentioned Goldman Sachs Group, Inc. in its Q4 2021 investor letter. Here is what the firm said:

“Rising interest rates, after a surprisingly long period of low absolute rates and negative “real” rates, will create a headwind. While there has been much debate about the cause of these low rates, we believe the most important factor has been the $120 billion in monthly federal reserve open market bond purchases and the accumulation of an $8 trillion balance sheet. The former will end, and the latter will shrink. It is not just the Fed that has aggressively purchased bonds, bidding up prices and lowering yields. Bond traders and hedge fund managers have added to positions, confident that being on the same side as the Fed was the wise place to be. Now as the Fed is about to become a seller of bonds rather than a buyer, Wall Street’s “smart money” is likely to follow suit. Against this backdrop, fixed income securities and bond substitutes such as high dividend paying utilities and absolute return hedge funds are substantially overpriced and are not likely to produce attractive returns going forward.

This expectation of a reversion to the mean for interest rates helped 2021 performance, though not as much as we had hoped. The yield on the U.S. 10-year Treasury did indeed increase from +0.92% at the beginning of the year to +1.52% at year-end. An underreported story was the poor performance of bonds last year. The Barclays Aggregate Index declined -1.67% for the year ending December compared to a return of +28.71% for equities as measured by the S&P 500. Interest rates have continued to climb in 2022 with the 10-year Treasury at +1.79% as we go to print. This move higher in rates has contributed to our good, early start to 2022. The Goldman Sachs Group, Inc. (GS) jumped +47.59% for the year and +1.73% in the quarter.”

7. BlackBerry Limited (NYSE:BB)

Chou Associates Management’s Stake Value: $2,839,000

Percentage of Chou Associates Management’s Portfolio: 1.51%

Number of Hedge Fund Holders: 20

BlackBerry Limited (NYSE:BB) is a Canadian software company specializing in cybersecurity. It has over 38,000 global patents and applications as of February 28, 2022. There were 20 hedge funds in our database that held stakes in BlackBerry Limited at the end of the first quarter of 2022, compared to 15 funds in the fourth quarter of 2021. Prem Watsa’s Fairfax Financial Holdings is BlackBerry Limited’s most significant stakeholder, with 46.72 million shares worth $348.10 million.

Chou Associates Management started building its position in BlackBerry Limited in the third quarter of 2013. In the first quarter of 2022, it held 382,900 shares of the company, valued at $2.84 million. The company represented 1.51% of the hedge fund’s 13F portfolio.

On May 19, Canaccord analyst T. Michael Walkley retained a Hold rating on BlackBerry Limited and decreased his price objective from $7 to $6. He said that the persistent, repeated compression of software stocks was the reason for his target lowering.

6. Citigroup Inc. (NYSE:C)

Chou Associates Management’s Stake Value: $3,081,000

Percentage of Chou Associates Management’s Portfolio: 1.63%

Number of Hedge Fund Holders: 88

Citigroup Inc. (NYSE:C) is an American investment bank and financial services provider with its headquarters in New York City. On July 18, UBS analyst Erika Najarian maintained a Neutral rating on Citigroup Inc. and boosted her price objective to $52 from $48.

On July 15, Citigroup Inc. published earnings for the second quarter, announcing earnings per share of $2.19, beating estimates by $0.52. In addition, the $19.64 billion revenue for the period was up 12.4% year-over-year, exceeding estimates by $1.32 billion.

Citigroup Inc. recently saw a fall in hedge fund sentiment. The number of long hedge fund positions reduced to 88 at the end of the first quarter, compared to 97 positions in the previous quarter.

Citigroup Inc. accounted for about 1.63% of Chou Associates Management’s portfolio, as the hedge fund owned a $3.08 million stake in the company. Warren Buffett’s Berkshire Hathaway, with approximately 55.16 million shares worth $2.95 billion, is the largest shareholder of Citigroup Inc. as of Q1.

In addition to JPMorgan Chase & Co., Bausch Health Companies Inc., and Wells Fargo & Company, Citigroup Inc. is one of the stocks gaining the attention of Francis Chou’s Chou Associates Management.

5. JPMorgan Chase & Co. (NYSE:JPM)

Chou Associates Management’s Stake Value: $3,309,000
Percentage of Chou Associates Management’s Portfolio: 1.76%
Number of Hedge Fund Holders: 110

JPMorgan Chase & Co. provides financial services to clients worldwide. Berenberg analyst Peter Richardson raised JPMorgan to Hold from Sell on July 18 with a price objective of $120. In the first quarter, Chou Associates Management sold 10,000 shares of JPMorgan Chase & Co., reducing its remaining stake by about 30%. At the end of the quarter, the hedge fund still held 24,275 shares of JPMorgan Chase & Co., worth about $3.31 million, representing 1.76% of its portfolio.

Hedge funds are piling into JPMorgan Chase & Co.. At the close of Q1 2022, Insider Monkey found 110 hedge funds long JPMorgan Chase & Co., up from 107 funds in the previous quarter.

Here is what Ariel Investments had to say about JPMorgan Chase & Co. in its Q4 2021 investor letter:

“In our view, inflation will not just be a 2021 phenomenon. Inflationary expectations are only now working themselves into the labor market with historically low unemployment, resurgent labor unions, and higher wages. These labor cost pressures are only starting to show up in the Consumer Price Index. The most recent Producer Price Index showed a +9% year over year increase, the highest since it was created in 2010. Higher input prices generally lead to rising consumer prices.

“In our view, inflation will not just be a 2021 phenomenon.”

Consumer balance sheets are in excellent shape with lower unemployment and banked stimulus checks. A recent analysis from JP Morgan Chase (JPM) showed average checking accounts have 50% higher balances than pre-Covid. The U.S. money supply as measured by M2 (a calculation that includes cash, checking accounts, and “near cash” such as money market securities) is up +38% versus year-end 2019. Higher consumer cash holdings and higher money supply mean more spending and demand for goods. Some emphasize supply issues to explain current inflation. Going forward, we see very strong demand as well, too much money chasing too few goods.”

4. MBIA Inc. (NYSE:MBI)

Chou Associates Management’s Stake Value: $9,227,000
Percentage of Chou Associates Management’s Portfolio: 4.9%
Number of Hedge Fund Holders: 18

MBIA Inc. (NYSE:MBI) offers financial guarantee insurance services to public finance markets. The hedge fund chaired by Chou held 599,530 shares in MBIA Inc., worth over $9.23 million in Q1 2022. It is the fourth largest holding of Chou Associates Management.

Kahn Brothers is the leading shareholder of MBIA Inc., with 4.83 million shares worth over $74.32 million. Next on the list is Hosking Partners, which owned 2.51 million shares of MBIA Inc., worth over $38.60 million.

MBIA Inc. experienced an increase in hedge fund interest recently. MBIA Inc. was in 18 hedge fund portfolios at the end of the first quarter of 2022. There were 17 hedge funds in our database with MBIA Inc. holdings at the end of the previous quarter.

In its Q4 2021 investor letter, Horos Asset Management mentioned MBIA Inc.. Here is what Horos Asset Management has to say about MBIA Inc. in its Q4 2021 investor letter:

“We completely sold our stake in MBIA after its good performance during the period. Although we still see upside and we believe that an eventual corporate transaction will come (the management team itself wants it to), time is working against its shareholders, so we are demanding a greater margin of safety in this investment.”

3. Bausch Health Companies Inc. (NYSE:BHC)

Chou Associates Management’s Stake Value: $17,480,000
Percentage of Chou Associates Management’s Portfolio: 9.3%
Number of Hedge Fund Holders: 48

Together with its subsidiaries, Bausch Health Companies Inc. creates, produces, and distributes a variety of pharmaceuticals, medical devices, and over-the-counter (OTC) drugs, particularly in the fields of dermatology, gastroenterology, and eye health.

With a $793.38 million stake in Bausch Health Companies Inc., Carl Icahn’s Icahn Capital LP owned 34.72 million shares of the company as of the end of the first quarter of 2022, making it the most significant shareholder of the company. In addition, our database shows that 48 hedge funds held stakes in Bausch Health Companies Inc. as of the end of the first quarter of 2022, versus 53 funds in the fourth quarter of 2021.

On June 13, JPMorgan analyst Chris Schott initiated coverage of Bausch Health Companies Inc. and assigned an Overweight rating and a price objective of $12. The hedge fund managed by Chou owned 765,000 shares in Bausch Health Companies Inc., worth over $17.48 million, representing close to 9.3% of its portfolio.

2. Resolute Forest Products Inc. (NYSE:RFP)

Chou Associates Management’s Stake Value: $39,975,000
Percentage of Chou Associates Management’s Portfolio: 21.26%
Number of Hedge Fund Holders: 21

Together with its subsidiaries, Resolute Forest Products Inc. (NYSE:RFP) engages in worldwide and domestic business in the forest products sector. Resolute Forest Products Inc. shares have offered investors more than 75% in returns over the past twelve months as of July 27.

Based on its 13F holdings for the first quarter of 2022, Chou Associates Management owned 3.10 million shares of Resolute Forest Products Inc., valued at $39.98 million. As of the end of the first quarter, 21 hedge funds in Insider Monkey’s database of 912 funds held stakes in Resolute Forest Products Inc., compared to 15 funds in the previous quarter.

Fairfax Financial Holdings is the biggest stakeholder of Resolute Forest Products Inc., with 30.55 million shares worth $394.07 million. After Resolute Forest Products Inc. announced a deal to be bought by Paper Excellence Group for $2.7 billion, TD Securities analyst Sean Steuart downgraded the business on July 7 from Buy to Hold with a price objective of $23, up from $16. Steuart stated that the proposed valuation was fair.

1. Berkshire Hathaway Inc. (NYSE:BRK-B)

Chou Associates Management’s Stake Value: $52,892,000
Percentage of Chou Associates Management’s Portfolio: 28.14%
Number of Hedge Fund Holders: 104

Berkshire Hathaway Inc. (NYSE:BRK-B) operates globally in the insurance, freight, rail transportation, and utilities sectors. Berkshire Hathaway Inc. has featured on Chou Associates Management’s portfolio since the fourth quarter of 2010. In the first quarter of 2022, Francis Chou’s Chou Associates Management owned 100 shares in Berkshire Hathaway Inc., worth over $52.89 million. On May 1, Keefe Bruyette analyst Meyer Shields maintained a Market Perform rating on Berkshire Hathaway Inc., while decreasing his price objective from $565,000 to $560,000.

According to our database, the long hedge funds positions in Berkshire Hathaway Inc. decreased at the end of the first quarter of 2022. 104 hedge funds were bullish on Berkshire Hathaway Inc. compared to 108 funds in the previous quarter. Berkshire Hathaway Inc. stands first on the list of 10 stocks to buy according to Francis Chou’s Chou Associates Management.

Here is what Diamond Hill Large Cap Fund has to say about Berkshire Hathaway Inc. (NYSE:BRK-A) in its Q1 2022 investor letter:

“Diversified holding company Berkshire Hathaway reported strong earnings during the quarter and benefited from continued share repurchases below intrinsic value. The company also announced significant deployments of excess cash during the quarter, including the acquisition of Alleghany and a large increase in its stake in Occidental Petroleum.”

You can also take a peek at 10 Stocks to Buy According to Carlson Capital and 10 Stocks to Buy According to Stephen DuBois’ Camber Capital Management

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