After adding 4.84 percent to his stake of paper and wood
products company Resolute Forest Products (
), Fairfax Financial Holdings'
now has a total holding of 19.9 million shares. The stake
increase was reported yesterday by
GuruFocus Real Time Picks
Watsa began his company holding in the fourth quarter of 2010,
starting off with about 13.2 million shares. At the time,
Resolute Forest Products was still known as AbitibiBowater,
trading under the stock symbol ABH. It was not until November
2011 that the company changed its name to what it is today.
Name change or not, Watsa remained loyal to the company, growing
his stake and not reducing once. Over the years, his holding
blossomed to, now, much more than the 18.91 percent ownership he
claimed in the third quarter of this year.
Resolute Forest Products is a large producer of newsprint,
commercial printing papers, market pulp and wood products, as it
operates 21 pulp and paper mills and 22 wood product facilities
in the U.S., Canada and South Korea. The company's stock is up
0.15 percent around noon, trading at the price of $12.93. Year to
date, the stock's market value has appreciated almost 10 percent.
In the third quarter, Resolute reported a decrease in adjusted
EBITDA compared to not only year-over-year's data, but also the
second quarter. The company also experienced a drastic operating
income decline, reporting $26 million in the quarter compared to
$72 million in the third quarter of 2011.
The main contributor for the change in operating income was
Resolute's volume decline to reduce its exposure to newsprint
export markets, which its fiscal release stated was "pressured by
the strong U.S. dollar" (Resolute is a Canada-based company).
Additionally, September's lumber shipments dropped, combined with
the company's continuous effort to optimize its assets.
"Our cost-focused strategy allowed us to maintain attractive
margins in the paper and wood products segments despite lower
shipments overall," said Richard Garneau, Resolute Forest's
president and CEO. "This is the direct result of our focus on the
items we control: selling only profitable tons and maintaining
world-class operational standards."
Resolute Forest Products remains one of Watsa's top holdings,
along with Johnson & Johnson (
), Research In Motion Ltd. (
) and Level 3 Communications Inc. (
Besides Watsa, other Gurus who have a holding of Resolute Forest
Paul Tudor Jones
, Donald Smith and Jeremy Grantham. (RFP: Guru Trades)
See Prem Watsa's portfolio here. Also check out his Undervalued
Stocks, Top Growth Companies and High Yield stocks.
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