Chou Associates Buys Chicago Bridge, Sears Canada; Sells Verizon

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Chou Associates Management reported that its equity portfolio has a market value of more than $381 million based on its 13F filing with the Securities and Exchange Commission (SEC) for the fourth quarter of 2014.


Francis Chou is the CEO of Chou Associates. He is a value investor. Some people in the investment industry calls him a bottom fisher. He buys bargains and maintains discipline. Chou would rather hold onto cash than pay overprice for a stock.

Chou Associates’ new stockholdings

Based on Chou’s filing, his firm acquired a new position in Chicago Bridge & Iron Company and Sears Canada. Chou Associates also acquired JPMorgan Chase (W EXP 10/28/201).

During the quarter, Chou Associates purchased 67,446 shares of Chicago Bridge & Iron Company worth approximately $2.83 million.

Chicago Bridge & Iron Company provides engineering, construction, maintenance and fabrication services. The company also provides design-build infrastructure projects for local, state and federal government.

Analysts at Bank of America recently initiated coverage on the shares of Chicago Bridge & Iron Company with an Underperform rating and $34 price target. The company’s shares trading $38.56 per share, up by nearly 2% at the time of this writing around 1:30 in the afternoon in New York.

The shares of Chicago Bridge & Iron Company traded between $32.16 and $89.22 per share over the past 52 week. The company lost more than 51% of its stock value over the past year.

Chou Associates acquired 775,149 shares of Sears Canada worth around $7.47 million. Last month, the board of directors of the retailer permanently appointed Ronald Boire as president and CEO. Boire led the company in an acting capacity since October last year when Douglas Campbell stepped down from his position.

Boire previously stated the Sears Canada is not going away. According to him, he is focused on the big work ahead—brand, products and growing sales. He said, “I obsess about the product and the services that we offer customers in store and online.  That is what is going to transform the company – it is not going to be transformed by the balance sheet. It is going to be transformed by the product and the income statement.”

The shares of Sears Canada are trading $11.73 per share, up by more than 1% at the time of this writing. The stock traded between $8.50 and $17.54 per share over the past 52-weeks.  The company gained 4% year-to-date.

Chou Associates purchased 1,126,347 shares of JPMorgan Chase (W EXP 10/28/201) worth approximately $23.47 million. The bank announced the ouster of its two senior executives connected to Chinese hiring scandal.

JPMorgan Chase said Todd Marin, vice chairman of Asia-Pacific Investment Banking and Catherine Leung, vice chairman of Asia Investment Banking will step down from their positions over the next few weeks, according to report from Wall Street Journal.

U.S. regulators are investigating JPMorgan and other banks’ hiring practices in Asia whether the children of Chinese government officials were employed “in return for lucrative investment-banking assignments the officials could dole out.”

Reduce and sold out positions

Chou Associates reduced its position in Resolute Forest Products by 36,041 shares to 4,081,218 shares. Its stake in the company is worth More than $71.89 million.

The firm sold out its entire position in Verizon Communications, Vodafone Group, Lands’ End and Utstarcom Holdings.

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