Francis Chou Adds Dell, RIMM; Sells Sprint Nextel and USG

Francis Chou Adds Dell, RIMM; Sells Sprint Nextel and USG
By U.S. Government [Public domain], via Wikimedia Commons

Francis Chou, the chief executive officer of Toronto-based Chou Associates Management, added a few companies to his portfolio that seem to be heavily undervalued, according to the 13F filing with the Securities and Exchange Commission. Chou invests in only a few, but well-chosen companies that trade at 40-50 percent lower than their estimated market value.

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Francis Chou Adds Dell, RIMM; Sells Sprint Nextel and USG

During the third quarter, Francis Chou made two new purchases, exited one stock and reduced holdings in five stocks. Chou’s portfolio consists of 35 stocks. Top ten holdings contribute to 63.55 percent of the firm’s portfolio.

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Top Positions

Berkshire Hathaway is the biggest holding of Chou. He owns 300 Berkshire Hathaway Inc. (NYSE:BRK.A) (BRK.B) shares that are worth $39 million. The next major holding is Resolute Forest Products Inc (NYSE:RFP) in which Chou owns 3,062,268 shares worth $39.8 million. By the end of the third quarter, Chou owned 683,700 shares of Sears Holdings Corporation (NASDAQ:SHLD) that have a market value of $37.93 million., Inc. (NASDAQ:OSTK) is the next favorite of Francis Chou, in which he owned 2,310,209 shares with a market value of $23.9 million at the end of Q3. However, Chou sold some of his shares in Overstock in October after the, Inc. (NASDAQ:OSTK) fraud debate gained momentum.

New Positions

Chou bought 1,500,000 shares of Dell in the third quarter for $14.78 million. Another new purchase is the struggling BlackBerry maker Research In Motion Limited (NASDAQ:RIMM) (TSERIM). The firm purchased 200,000 RIM shares for an estimated $1.5 million. The Canadian smartphone maker is relying on the upcoming BlackBerry 10 device to gain its lost glory.

Reduced Holdings

Francis Chou reduced its stake in five stocks. It sold 277,864 shares in Flagstone Reinsurance Holdings SA (NYSE:FSR) in Q3, but still had 1,222,136 shares worth $10 million in the company. Additionally, the fund sold 50,000 The Gap Inc. (NYSE:GPS) shares, bringing down the holding from 133,590 shares to 83,590 shares by September 30.

Chou sold 3,000,000 shares of Sprint Nextel Corporation (NYSE:S), retaining just 3,123,200 shares at the end of Q3. The Canadian fund also offloaded 50,000 shares of Symetra Financial Corporation (NYSE:SYA). Though Watson Pharmaceuticals, Inc. (NYSE:WPI) is the fourth largest holding of Chou, the fund sold 200,000 shares during the third quarter. That brought Chou’s stake in the company to 335,400 shares worth $28.56 million.

Chou Associates Management sold its entire holding (54039 shares) in USG Corporation (NYSE:USG).

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