Chou Associates Management recently published its 2018 Annual Report revealing which positions from its equity portfolio contributed mostly to its last year’s poor performance among which was Resolute Forest Products Inc. (NYSE:RFP). If you are interested you can track down a copy of the report – here. Let’s take a look at what Chou Associates Management said about the company in the report:
“Resolute Forest Products
As of December 31, 2018, the market price of Resolute Forest Products (“RFP”) was US$7.93 per share, giving a market capitalization of about US$720 million dollars. This was after US$1.50 per share in special dividends that we received in December 2018.
With the appointment of Yves Laflamme as RFP’s new CEO in February 2018, there is more optimism on what the company can do with its four business segments. However, the stock continues to trade at less than six times earnings.”
Resolute Forest Products is a company that manufactures a variety of paper and pulp products. It was formed 12 years ago, as a result of a merger between Abitibi-Consolidated and Bowater Inc. Year-to-date, the company’s stock lost 4.7%, and on April 9th it had a closing price of $7.71. Resolute Forest Products has a market cap of $703.22 million, and it is trading at a P/E ratio of 3.06.
Of the funds tracked by Insider Monkey, Prem Watsa’s Fairfax Financial Holdings has the most valuable position in Resolute Forest Products Inc (NYSE:RFP), worth close to $242.2 million, amounting to 13.5% of its total 13F portfolio. Chou Associates Management is on Fairfax Financial Holdings’ heels with a $36.3 million position; 16.3% of its 13F portfolio is allocated to the stock. Other peers that are bullish contain Jim Simons’ Renaissance Technologies, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Phil Frohlich’s Prescott Group Capital Management.
As industrywide interest jumped, specific money managers have been driving this bullishness. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the largest position in Resolute Forest Products Inc (NYSE:RFP). Marshall Wace LLP had $0.5 million invested in the company at the end of the quarter. Bradley Louis Radoff’s Fondren Management also made a $0.3 million investment in the stock during the quarter. The other funds with new positions in the stock are David Harding’s Winton Capital Management, Minhua Zhang’s Weld Capital Management, and Michael Platt and William Reeves’s BlueCrest Capital Mgmt..
In its last financial report for the fourth quarter of 2018, Resolute Forest Products disclosed net income of $36 million or $0.38 per diluted share, versus $13 million, or $0.14 per diluted share in the corresponding quarter of 2017.
Disclosure: None. This article is originally published at Insider Monkey.