Author Topic: Fairfax India Price  (Read 7171 times)

alpha

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Fairfax India Price
« on: July 17, 2017, 08:49:04 AM »
Since July 2nd FIH.U is up ~15% .... is this being driven by news of the airport deal closing or has there some other news announced recently?



ICUMD

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Re: Fairfax India Price
« Reply #1 on: July 17, 2017, 10:52:06 AM »
I think this is a case of a highly undervalued stock realizing its potential.  It holds several very valuable and profitable companies, including nearly a 50% stake in BIAL.  EPS is growing, trading at low PE multiples and its aggressively expanding in a developing country.

Many already invested are wondering why its not going up faster.  ;D
FIH.U TCEHY, IFFNY, BRK.B

Zorrofan

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Re: Fairfax India Price
« Reply #2 on: July 21, 2017, 05:43:00 PM »


Many already invested are wondering why its not going up faster.  ;D

Many who are invested are wondering why they didn't buy more :(

nwoodman

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Re: Fairfax India Price
« Reply #3 on: August 15, 2017, 04:23:18 PM »
Interesting article on IIFL, a very impressive home run for Fairfax

https://www.outlookbusiness.com/specials/the-outperformers_2017/prudent-financier-3679

"With that principled stance, the story can only get better going forward. IIFLís strong and increasing retail presence already sets a robust foundation for future growth. With a collection infrastructure already in place, operating leverage will come into play, and as it has a bouquet of financial products to offer, there is tremendous scope to cross-sell to retail clients. Bank or non-bank, the next five years for IIFL may well be better than the past five. Prem Watsa, after all, is not playing for short-term gain."

wondering

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Re: Fairfax India Price
« Reply #4 on: August 31, 2017, 01:34:14 PM »
Wow! According to google finance, Fairfax India closed at 18.94 USD (or up 7.8%).  Does anyone know the reason for such a big jump? I don't know if the Thursday before a long weekend (i.e. very low trading volumes) has anything to do with it.

ICUMD

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Re: Fairfax India Price
« Reply #5 on: August 31, 2017, 06:20:37 PM »
Supply and demand  ::)
Why do you think it went up?
FIH.U TCEHY, IFFNY, BRK.B

DooDiligence

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Re: Fairfax India Price
« Reply #6 on: August 31, 2017, 09:05:56 PM »
abc | abev | aapl | bbh | brk.b | cvs | dva | dis | ew | ffxdf | gpc | mo | nvo | sftby | vde

7 months left in the BRK.B 1st of the month DCA program (hoping 4 a selloff 2 go all in!)

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Shooter MacGavin

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Re: Fairfax India Price
« Reply #7 on: September 01, 2017, 01:02:21 PM »
To the Fairfax India Investors,

I just recently started doing work on this.  I wanted to get your opinion on something.

I really like the idea of buying into a company that has a strong board and good investors partaking in a really fast growing region of the world.  But why do they focus on change in book value as a proxy for their success?  You don't see Markel or Berkshire or others focus on change in book value for their private businesses.  I know in general they have focused on it for the insurance side and MKL still does for the insurance operations because the majority of it is still liquid and marked to market, but for the private pieces they do not really emphasize that.  Certainly you don't see them do a level 3 valuation for the private businesses.  You see them disclose earnings. 

Fairfax India do a subpar job of disclosing earnings trends for their private businesses, so you have to trust their internal valuation.  But the way they value stuff - at first glance - is so incredibly subjective and for them to reward themselves based on this is really odd.

As an example of why it could be goofy, Let's assume I bought 100% of GM stock at 6x earnings ($6.00 per share/ $36 dollar stock).  And then I turn around and say using a 10% discount rate , i value it at $60.  Well, that may be fair, but something seems a bit off about that to me. Isn't that some of what's going on at Fairfax India?  They're buying both public and private businesses, but then they're re-valuing upwards the private businesses..which may be justified by improved earnings power, increased capital retained and an increased business outlook, but it also may be a valuation arbitrage.

The stock is now trading at a 35-40% premium to book value, which already bakes in some of the upside from the private businesses because the investments are getting valued upwards on their books.  They may have great assets but it seems like not a great buy.
 
Just trying to get your food for thought.  Thank you.

hobbit

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Re: Fairfax India Price
« Reply #8 on: September 01, 2017, 01:46:27 PM »
To the Fairfax India Investors,

I just recently started doing work on this.  I wanted to get your opinion on something.

I really like the idea of buying into a company that has a strong board and good investors partaking in a really fast growing region of the world.  But why do they focus on change in book value as a proxy for their success?  You don't see Markel or Berkshire or others focus on change in book value for their private businesses.  I know in general they have focused on it for the insurance side and MKL still does for the insurance operations because the majority of it is still liquid and marked to market, but for the private pieces they do not really emphasize that.  Certainly you don't see them do a level 3 valuation for the private businesses.  You see them disclose earnings. 

Fairfax India do a subpar job of disclosing earnings trends for their private businesses, so you have to trust their internal valuation.  But the way they value stuff - at first glance - is so incredibly subjective and for them to reward themselves based on this is really odd.

As an example of why it could be goofy, Let's assume I bought 100% of GM stock at 6x earnings ($6.00 per share/ $36 dollar stock).  And then I turn around and say using a 10% discount rate , i value it at $60.  Well, that may be fair, but something seems a bit off about that to me. Isn't that some of what's going on at Fairfax India?  They're buying both public and private businesses, but then they're re-valuing upwards the private businesses..which may be justified by improved earnings power, increased capital retained and an increased business outlook, but it also may be a valuation arbitrage.

The stock is now trading at a 35-40% premium to book value, which already bakes in some of the upside from the private businesses because the investments are getting valued upwards on their books.  They may have great assets but it seems like not a great buy.
 
Just trying to get your food for thought.  Thank you.

http://s1.q4cdn.com/293822657/files/doc_presentations/2017/Fairfax-India-Annual-Meeting-4.20.2017.pdf

?

rohitc99

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Re: Fairfax India Price
« Reply #9 on: September 01, 2017, 04:37:04 PM »
To the Fairfax India Investors,

I just recently started doing work on this.  I wanted to get your opinion on something.

I really like the idea of buying into a company that has a strong board and good investors partaking in a really fast growing region of the world.  But why do they focus on change in book value as a proxy for their success?  You don't see Markel or Berkshire or others focus on change in book value for their private businesses.  I know in general they have focused on it for the insurance side and MKL still does for the insurance operations because the majority of it is still liquid and marked to market, but for the private pieces they do not really emphasize that.  Certainly you don't see them do a level 3 valuation for the private businesses.  You see them disclose earnings. 

Fairfax India do a subpar job of disclosing earnings trends for their private businesses, so you have to trust their internal valuation.  But the way they value stuff - at first glance - is so incredibly subjective and for them to reward themselves based on this is really odd.

As an example of why it could be goofy, Let's assume I bought 100% of GM stock at 6x earnings ($6.00 per share/ $36 dollar stock).  And then I turn around and say using a 10% discount rate , i value it at $60.  Well, that may be fair, but something seems a bit off about that to me. Isn't that some of what's going on at Fairfax India?  They're buying both public and private businesses, but then they're re-valuing upwards the private businesses..which may be justified by improved earnings power, increased capital retained and an increased business outlook, but it also may be a valuation arbitrage.

The stock is now trading at a 35-40% premium to book value, which already bakes in some of the upside from the private businesses because the investments are getting valued upwards on their books.  They may have great assets but it seems like not a great buy.
 
Just trying to get your food for thought.  Thank you.

I would actually say they are being too conservative in their valuation. for example, in case of BIAL their DCF assumes a growth of 3% or something like that. i think thats the case for almost all the private holdings where they have assumed such low single digit growth rates.

they may sound right in NA, but in india (where i invest), this way below par. inflation itself is 6-7%. on average 10% is the starting point and finding companies growing at 15%+ in not difficult. for example IIFL is growing 30%+ and thats not extra-ordinary ..par for the course in this sector for well managed companies.

BIAL has been growning passenger traffic at 20%+ and i have travelling via that airport for ages. that part of the city is expanding the land around airport is going to far more valuable in the future.

that does not mean the stock is fairly priced or something like that ..just that these companies have very good growth opportunities ahead of them