Fairfax Financial Holdings Limited (Symbol-FFH)

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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by Flaccidsteele »

FFH is one of the few Canadian stocks purchased during the tech wreck at around $140/sh. Apparently it's almost a 5-bagger over 13 years. Unfortunately I only purchased 100 shares. At the time I had the inexplicable "goal" of owning both Fairfax and Berkshire Hathaway (class B) as "anchor" stocks in my RRSP. (???)

I continue to assume that the FFH AGM is as edge-of-my-seat riveting as the BRK AGM so I never attend. *zzz*
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by jaguar »

Today Fairfax is offering about $200 million of 4.75% 5-year rate reset preferreds Series M at CAD25.
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by AltaRed »

jaguar wrote:Today Fairfax is offering about $200 million of 4.75% 5-year rate reset preferreds Series M at CAD25.
I don't know this issue is any better than existing FFH.PR.C which yields circa 4.5%, resets end of 2019 at GoC5 +315.... and is currently priced about $23.25 (and as low as circa $22.30 at the beginning of this month). Yields look attractive but one must remember, both are sub-investment grade. I suspect it will be fully subscribed early by investors chasing yield at zero commission.
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by scomac »

AltaRed wrote:
jaguar wrote:Today Fairfax is offering about $200 million of 4.75% 5-year rate reset preferreds Series M at CAD25.
I don't know this issue is any better than existing FFH.PR.C which yields circa 4.5%, resets end of 2019 at GoC5 +315.... and is currently priced about $23.25 (and as low as circa $22.30 at the beginning of this month). Yields look attractive but one must remember, both are sub-investment grade. I suspect it will be fully subscribed early by investors chasing yield at zero commission.
I'm left scratching my head on these preferreds. I spent some time looking at them earlier this month. I don't know why you bother with the IPO when you could get a near term reset at sixty cents on the dollar. There is considerably great return potential for effectively the same risk being assumed. ISTM that if you're intent to reach for yield and you want a bit of interest rate protection, just buy one of the FFH bonds that are due in 2019-20. At least you've got an out and in the mean time get to collect a pretty nice yield premium of other 'investment grade' corporates.
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by AltaRed »

FWIW, I'd rather buy FFH.PR.C at less than $23 than the current IPO (per your thoughts) but I am not keen on sub-investment grade...so far.
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by adrian2 »

scomac wrote:
AltaRed wrote:
jaguar wrote:Today Fairfax is offering about $200 million of 4.75% 5-year rate reset preferreds Series M at CAD25.
I don't know this issue is any better than existing FFH.PR.C which yields circa 4.5%, resets end of 2019 at GoC5 +315.... and is currently priced about $23.25 (and as low as circa $22.30 at the beginning of this month). Yields look attractive but one must remember, both are sub-investment grade. I suspect it will be fully subscribed early by investors chasing yield at zero commission.
I'm left scratching my head on these preferreds. I spent some time looking at them earlier this month. I don't know why you bother with the IPO when you could get a near term reset at sixty cents on the dollar. There is considerably great return potential for effectively the same risk being assumed.
Yabbut the new issue is almost certainly going to be redeemed by the company after 5 years (it's paying GOC5 + 398 bps), as long as FFH's credit rating does not significantly deteriorate. So, in the eyes of many participants, it's 5 year money @ 4.75%.

The existing FFH issues trading at a discount have more perpetual risk; however, who knows how the creditworthiness of the mother company might evolve in 5 years time? Place your bets, ladies and gentlemen, place your bets!

BTW, i was tempted to place an expression of interest for the new preferred, but I stopped at the last second.
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by AltaRed »

At 398bp, I agree it is likely redemption material (and it is so priced today because of what GoC5 is today). That said, I would rather wait and see what the secondary market has to say. If it goes to a premium, then good luck to those who bit. If it settles to a slight discount, then it is an opportunity. Hence I did not put in an expression of interest either. The new issue is still 'open' at this moment at Scotia.
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by FinEcon »

Flaccidsteele wrote:FFH is one of the few Canadian stocks purchased during the tech wreck at around $140/sh. Apparently it's almost a 5-bagger over 13 years. Unfortunately I only purchased 100 shares. At the time I had the inexplicable "goal" of owning both Fairfax and Berkshire Hathaway (class B) as "anchor" stocks in my RRSP. (???)

I continue to assume that the FFH AGM is as edge-of-my-seat riveting as the BRK AGM so I never attend. *zzz*
I've yet to attend but from what I've read on the Corner of FFH board, it is a stellar event. Kind of like if you were smart enough to be an attendee at Berk meetings in the 80's or Wesco in the 90's (day long Munger lecture in a small room). This event could get even me to forget my profound distaste for Toronto long enough to attend.
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by randomwalker »

Fairfax Financial Holdings Ltd proposes fixing Prem Watsa’s multiple share voting stake at 41.8%
Republish Reprint by Barry Critchley | National Post June 12, 2015

"...Prem Watsa, founder of Fairfax Financial Holdings Ltd. and one of the country’s leading investors, is advancing a controversial proposal that would fix his current multiple-voting stake in the company at 41.8 per cent, regardless of the voting power attached to those shares."

http://business.financialpost.com/news/ ... ke-at-41-8
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by brad911 »

AltaRed wrote:FFH seems to have stumbled a fair bit this past year or so. Just a streak of bad luck/gambles? Or is the boss losing his touch? [Probably better asked in the FFH thread]
My last analysis had a price target at $575 and this was back in January 2016 when I was committing capital to other positions. I need to look at the last few quarters and thoughts on earning growth from this newest transaction. My first impression is its a little on the rich side.
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by Descartes »

Fairfax Financial to buy Allied World for $4.9 billion in Prem Watsa’s biggest deal yet
This is seen as a bullish move by the media: strange from Prem.
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by AltaRed »

Some of this is what I did not get:
Watsa has had less success with his purchase of media companies. He bought shares in CanWest Media, former owner of many Postmedia titles including the National Post, which filed for protection from creditors in 2009 and sold off its assets. Watsa also owns a substantial stake in Torstar Corp., buying some shares for as much more than $19 a share. Torstar shares were trading at $1.65 at mid-day Monday.

Another controversial play for Watsa was his investment in BlackBerry Ltd., the smartphone maker that has struggled to reinvent itself in the growing shadows of Apple Inc. and Google Inc.’s Android.
Did he not see what happened to Yellow Pages re the print business that cannot re-invent itself? Does he not understand what happens to imploding tech companies that seem to continue to the depths of the Mariana Trench? It is one thing to take bets on 'temporary' financial crises (a lot of us did so in 08/09) but buggy and whip type businesses tend to die regardless.

At least this latest purchase is in the financial industry that he understands.
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by brad911 »

And that was the sign I was waiting to see....that why could focus on their core strength and continue to focus there. This is only one step (albeit a big one). Still finding the transaction expensive, but it got unanimous votes from the board.
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by Taggart »

Fairfax buys $11.8 million worth of Torstar shares

The financial company now owns 40.6 per cent of the Toronto Star owner's non-voting shares.
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by AltaRed »

Prem Watsa has made some really wierd investments in the last 5 years or so. Either he sees something most of us cannot or he's losing it in his old age.
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by nisser »

I guess he has 11$ million to throw away :lol:
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

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Toronto investment firm gets on board with Churchill port, northern rail purchase
Fairfax Financial Holdings to partner with Manitoba groups to buy rail line and Churchill port, sources say

By Sean Kavanagh, CBC News Posted: Nov 16, 2017

http://www.cbc.ca/news/canada/manitoba/ ... -1.4405219
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by Pitzeco »

Dividend came in today - https://www.fairfax.ca/news/press-relea ... fault.aspx

10 USD a share. I assume FFH.U in a US account would pay this exactly. Who's doing the conversion on the Canadian side with FFH? Doesn't appear to be the broker as there is no exchange, just a CAD deposit. Exchange rate based on USD dividend is 1.2615 USDCAD. Should this be compared to the record date Jan 17, or dividend date Jan 28? Either way it is about 80-160 bps 'fee' in a back of the envelope calc.

I generally would put Canadian USD paying dividend stocks in a US account but that was to avoid broker conversions on actual USD being deposited. Do people do the same with Fairfax?
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by AltaRed »

I have read that in a few (some) cases, the issuing company does the conversion to CAD at BoC rates (no commission) and issues it to the brokerage rather than the normal course of action which is to issue the dividend only in USD and let the brokerage make the conversion for those holding the stock in their CAD accounts. I think one can only determine that after receiving a dividend or two and doing their own calculations.

P.S. I would think the forex rate would be that in place on dividend payment date but I don't know.
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by ukridge »

Ouch! Down almost 12% today.

Morningstar was rating it overvalued even before before the Muddy Waters muddied the waters. No further insight yet from the research material available in RBCDI.

Let's see what happens over the next few weeks.

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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by NormR »

ukridge wrote: 08 Feb 2024 18:54 Ouch! Down almost 12% today.
The MW report was pretty weak IMHO. It was basically a valuation-based short (arguing for a 18% overstatement of book value) for a company trading at 5 times forward earnings. :roll:

It's completely incorrect to associate growth in Fairfax with book value adjustment
https://www.bnnbloomberg.ca/investing/v ... rt~2863752

Perhaps the report allowed for a little short covering of a position gone very wrong?

A big drip might prompt me to buy more. :wink:
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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by ukridge »

NormR wrote: 08 Feb 2024 19:38
The MW report was pretty weak IMHO. It was basically a valuation-based short (arguing for a 18% overstatement of book value) for a company trading at 5 times forward earnings. :roll:

It's completely incorrect to associate growth in Fairfax with book value adjustment
https://www.bnnbloomberg.ca/investing/v ... rt~2863752

Perhaps the report allowed for a little short covering of a position gone very wrong?

A big drip might prompt me to buy more. :wink:
If an entity names itself 'Muddied waters', it's hard to take its statements seriously. :wink:

I have some FFH in the TFSA. I've done well wit the position. Most of the TFSA is index funds, this being an exception. I'm inclined to ride this out.

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Re: Fairfax Financial Holdings Limited (Symbol-FFH)

Post by brady »

I own this stock and I am not selling it. I need to see more then the Muddy Waters report to consider selling it. FFH will be reporting shortly and it will be interesting to see how the street reacts to those financials.
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