Steelhead Partners Cut Stake In Resolute Forest Products Inc (RFP)

Michael Johnston and his fund, Steelhead Partners, are limiting their exposure to Resolute Forest Products Inc (NYSE:RFP). In a recent Form 4 filing with the Securities and Exchange Commission, Steelhead Partners has disclosed the sale of 247,346 shares in seven transactions at prices varying between $19.75 and $20.00 apiece. As a result, the fund is left with 12.5 million shares which, given the current market price of $18.84 per share, are worth approximately $236 million.

Resolute Forest Products Inc (NYSE:RFP) is also on the radar of Prem Watsa, the manager of Fairfax Financial Holdings. In its latest 13F filing, Fairfax disclosed ownership of over 29 million shares valued at approximately $465 million. Francis Chou is also bullish on this stock, having increased his fund’s stake by 2% during Q4 of 2013. His fund, Chou Associates Management, holds 4.22 million shares reportedly worth $67.7 million.

A manufacturer of specialty papers and wood products, Resolute Forest Products Inc (NYSE:RFP) has a market cap of $1.78 billion and does not pay a dividend. So far this year, the stock has advanced by 18% and is traded at a forward Price to Earnings (P/E) ratio of 12.xx. The company has announced $1.15 billion in revenues and earnings of $0.21  per share, for the 2013 fourth quarter. Analysts expect Resolute Forest Products to register revenues of $1.07 billion and earnings per share of $0.34  for the first quarter of 2014. The stock is mainly recommended as ‘Hold.’

During the fourth quarter of 2013, Johnston has increased his fund’s investment in Alpha Natural Resources, Inc. (NYSE:ANR) to 12.5 million shares valued at $89.4 million, making it the fund’s 3rd largest position as of December 31, 2013. He has also slightly decreased Steelhead’s second biggest equity position, Level 3 Communications, Inc. (NYSE:LVLT), to 2.71 million share reportedly worth approximately $90 million.

Disclosure: none.

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