Author Topic: Fairfax stock positions  (Read 43771 times)

valueinvesting101

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Re: Fairfax stock positions
« Reply #30 on: October 18, 2019, 11:01:55 AM »
As per Fairfax India or Fairfax Financial annual report, Prem had indicated IIFL pre-demerger were trading at attractive valuation and now de-merged companies are even cheaper.  CSB Bank has also indicated that it is filing for IPO next month and some of the existing investors are also selling their holding in CSB.


investmd

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Re: Fairfax stock positions
« Reply #31 on: October 19, 2019, 04:20:46 PM »
By my maths the top 4 positions are now:

$1bn Eurobank/Grivalia, which could have a long way yet to run.
$930m Blackberry (including the convertible at par) which seems to be gaining operating momentum.
$820m Seaspan (not including $500m of debt, but including the profit on the exercise of the third tranche of options, which are in the money).
$700m ICICI Lombard which has had a terrific run and which I suspect they might sell.

Following up on results 6 months after this post on top 4 FFH positions:
Eurobank - UP 17%
Blackberry - DOWN 44%
Seaspan - UP 10%
ICICI Lombard - UP 16% (& recent FFH exit)

FFH share price over last 6 months - DOWN 11%

All of us are likely keen to see result of if/how FFH uses large cash position from recent ICICI Lombard sale to drive value for FFH.

Sombunall

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Re: Fairfax stock positions
« Reply #32 on: October 20, 2019, 05:20:51 AM »
Thanks for the summary. And yes, definitely keen to see what they'll do with the proceeds... I think anything less than more buybacks at this price would be a disappointment for most. We will see!

Viking

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Re: Fairfax stock positions
« Reply #33 on: October 20, 2019, 11:53:19 PM »
Thanks for the summary. And yes, definitely keen to see what they'll do with the proceeds... I think anything less than more buybacks at this price would be a disappointment for most. We will see!

I just listened to the WR Berkley Q2 call and Rob Berkely stated they feel pricing is firming. Fairfax said on the Q2 call that growing the business at their operations is a priority (to take advantage of the hard market that is developing) and you can see this in the growth they are posting. Fairfax also mentioned they are required to take out minority stakes in Brit and Eurolife in 2019. They also need to take out OMERS and their minority stake at Allied World at some point and this will be a big use of cash. So i am not expecting aggressive share repurchases until we get more clarity on how much new business they can write in the hard market and timing and cost on the minority buyouts.

They also appear focussed on harvesting some gains (ICICI Lombard) and also exiting some positions (Reitmans). If they do more of this then perhaps they will get more aggressive with share buybacks.

petec

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Re: Fairfax stock positions
« Reply #34 on: October 21, 2019, 12:56:58 AM »
Thanks for the summary. And yes, definitely keen to see what they'll do with the proceeds... I think anything less than more buybacks at this price would be a disappointment for most. We will see!

I just listened to the WR Berkley Q2 call and Rob Berkely stated they feel pricing is firming. Fairfax said on the Q2 call that growing the business at their operations is a priority (to take advantage of the hard market that is developing) and you can see this in the growth they are posting. Fairfax also mentioned they are required to take out minority stakes in Brit and Eurolife in 2019. They also need to take out OMERS and their minority stake at Allied World at some point and this will be a big use of cash. So i am not expecting aggressive share repurchases until we get more clarity on how much new business they can write in the hard market and timing and cost on the minority buyouts.


Exactly right, in my view. Pity.
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Viking

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Re: Fairfax stock positions
« Reply #35 on: November 03, 2019, 08:29:16 PM »
Does anyone have an opinion of what positions Fairfax is looking to monetize next (stock holdings, affiliates etc)? This has the potential to be a nice short term catalyst for the shares. Here is what the company had to say on the Q3 conference call.

Paul Holden (CIBC): "...you referred to monetizations and process. I was wondering if we can kind of get a status update on that monetization and process and just a characterization of how far you think you're along in that process. Is there still a lot to potentially do there?"

Paul Rivett (Fairfax): "...So we're quite far along in the process. There -- we've got the whole Hamblin Watsa team from Prem right through working with us. A number of these things are close to fruition. A few that are more at the earlier stages. But as you can imagine, we can't give you specifics on it, but we're very happy that we're close to being able to get a few things across the line in the fourth quarter. ICICI Lombard was part of that. So you saw that we can act fairly quickly. But also, it's a -- we want to get best price and best execution, right? So we're working to -- we're getting -- we're working to do that for our shareholders."
« Last Edit: November 03, 2019, 08:35:30 PM by Viking »

petec

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Re: Fairfax stock positions
« Reply #36 on: November 04, 2019, 02:42:09 AM »
Does anyone have an opinion of what positions Fairfax is looking to monetize next (stock holdings, affiliates etc)? This has the potential to be a nice short term catalyst for the shares. Here is what the company had to say on the Q3 conference call.

Paul Holden (CIBC): "...you referred to monetizations and process. I was wondering if we can kind of get a status update on that monetization and process and just a characterization of how far you think you're along in that process. Is there still a lot to potentially do there?"

Paul Rivett (Fairfax): "...So we're quite far along in the process. There -- we've got the whole Hamblin Watsa team from Prem right through working with us. A number of these things are close to fruition. A few that are more at the earlier stages. But as you can imagine, we can't give you specifics on it, but we're very happy that we're close to being able to get a few things across the line in the fourth quarter. ICICI Lombard was part of that. So you saw that we can act fairly quickly. But also, it's a -- we want to get best price and best execution, right? So we're working to -- we're getting -- we're working to do that for our shareholders."

What I thought was even more interesting was the commentary later on about wanting a more diverse, more liquid portfolio, albeit still with a value/opportunistic bent. They were also quite explicit about not wanting positions over $1bn (although that would mean reducing Eurobank which I think is unlikely and a mistake at this point).

Short answer to your question is I have no idea what they will sell but the changes might go some way towards addressing a lot of the concerns raised here over the years.
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bearprowler6

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Re: Fairfax stock positions
« Reply #37 on: November 04, 2019, 05:55:00 AM »
    Does anyone have an opinion of what positions Fairfax is looking to monetize next (stock holdings, affiliates etc)? This has the potential to be a nice short term catalyst for the shares. Here is what the company had to say on the Q3 conference call.

    Paul Holden (CIBC): "...you referred to monetizations and process. I was wondering if we can kind of get a status update on that monetization and process and just a characterization of how far you think you're along in that process. Is there still a lot to potentially do there?"

    Paul Rivett (Fairfax): "...So we're quite far along in the process. There -- we've got the whole Hamblin Watsa team from Prem right through working with us. A number of these things are close to fruition. A few that are more at the earlier stages. But as you can imagine, we can't give you specifics on it, but we're very happy that we're close to being able to get a few things across the line in the fourth quarter. ICICI Lombard was part of that. So you saw that we can act fairly quickly. But also, it's a -- we want to get best price and best execution, right? So we're working to -- we're getting -- we're working to do that for our shareholders."

    What I thought was even more interesting was the commentary later on about wanting a more diverse, more liquid portfolio, albeit still with a value/opportunistic bent. They were also quite explicit about not wanting positions over $1bn (although that would mean reducing Eurobank which I think is unlikely and a mistake at this point).

    Short answer to your question is I have no idea what they will sell but the changes might go some way towards addressing a lot of the concerns raised here over the years.

    Given the comments made on the call related to a more liquid portfolio it would seem a number of existing private investments would be the initial candidates for monitization. The would also be consistent with the comment mae by Prem in his march/2019 letter to shareholders:

    "We expect to monetize some of our remaining investments in private companies with similar results!"

    Therefore the likely candidates would inlcude the following:

    - APR Energy
    -Davos
    -Peak Performance (formerly Performance Sports)
    -Farmers Edge
    -Toys R US (land value which they continually say is the value of the investment made)
    -Boat Rocker
    -Sporting Life/Golf Town

    Monitization could take several forms including IPOs and/or sale of a part  or whole of these investments to a private equity buyer.

    The following from their public holdings are also possibilities:

    -CIB (Egypt)
    -Sterling Resorts (held through Thomas Cook)
    -Thomas Cook itself
    -Resolute Forest (take the hit and move on)



    petec

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    Re: Fairfax stock positions
    « Reply #38 on: November 04, 2019, 07:40:59 AM »
      Does anyone have an opinion of what positions Fairfax is looking to monetize next (stock holdings, affiliates etc)? This has the potential to be a nice short term catalyst for the shares. Here is what the company had to say on the Q3 conference call.

      Paul Holden (CIBC): "...you referred to monetizations and process. I was wondering if we can kind of get a status update on that monetization and process and just a characterization of how far you think you're along in that process. Is there still a lot to potentially do there?"

      Paul Rivett (Fairfax): "...So we're quite far along in the process. There -- we've got the whole Hamblin Watsa team from Prem right through working with us. A number of these things are close to fruition. A few that are more at the earlier stages. But as you can imagine, we can't give you specifics on it, but we're very happy that we're close to being able to get a few things across the line in the fourth quarter. ICICI Lombard was part of that. So you saw that we can act fairly quickly. But also, it's a -- we want to get best price and best execution, right? So we're working to -- we're getting -- we're working to do that for our shareholders."

      What I thought was even more interesting was the commentary later on about wanting a more diverse, more liquid portfolio, albeit still with a value/opportunistic bent. They were also quite explicit about not wanting positions over $1bn (although that would mean reducing Eurobank which I think is unlikely and a mistake at this point).

      Short answer to your question is I have no idea what they will sell but the changes might go some way towards addressing a lot of the concerns raised here over the years.

      Given the comments made on the call related to a more liquid portfolio it would seem a number of existing private investments would be the initial candidates for monitization. The would also be consistent with the comment mae by Prem in his march/2019 letter to shareholders:

      "We expect to monetize some of our remaining investments in private companies with similar results!"

      Therefore the likely candidates would inlcude the following:

      - APR Energy
      -Davos
      -Peak Performance (formerly Performance Sports)
      -Farmers Edge
      -Toys R US (land value which they continually say is the value of the investment made)
      -Boat Rocker
      -Sporting Life/Golf Town

      Monitization could take several forms including IPOs and/or sale of a part  or whole of these investments to a private equity buyer.

      The following from their public holdings are also possibilities:

      -CIB (Egypt)
      -Sterling Resorts (held through Thomas Cook)
      -Thomas Cook itself
      -Resolute Forest (take the hit and move on)



      I believe they were considering Quess a while ago but I can't believe they would sell it at this price.

      I think CIB may be a very long term position given how profitable it is and how underbanked Egypt is. Maybe they'll merge it with ATMA one day ;)[/list]
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      Viking

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      Re: Fairfax stock positions
      « Reply #39 on: November 06, 2019, 09:55:48 PM »
      Petec, thanks again for getting this thread started and posting your summary :-) I have spend a couple of days of my life trying to figure out what the actual size of each of the various positions are (in $US). So I can understand magnitude and compare positions. I also want to be able to track them to understand how they will impact FFH results at quarter end. I have tried to determine the actual amount of shares Fairfax currently holds, what the share price is (local currency), total value of holding, currency conversion to $US etc. For those who like detail look at the attached Excel spreadsheet; hopefully it is not too confusing :-) Please let me know if you see and errors; for starters I am not sure if I have calculated Fairfax India and Africa correctly given what is reported on the Balance Sheet. And feel free to copy and use the spreadsheet to fit your needs. My plan is to try and get position sizes for as many holdings as possible, including private holdings (Toys 'R Us etc) so stay tuned. 

      Value (in millions) of Stock Holdings as of Nov 6 (all in $US). Percent = share of listed 15 holdings.
      1.) Eurobank =         $1,156  = 22% (C = common stock on balance sheet)
      2.) Seaspan =             $873  = 17% (A) (not including 25 million $8.06 warrants)
      3.) Blackberry =          $259  =   5% (C) (not including convert; it would be top 3 if included)
      4.) Recipe =                $467  =   9% (A = investment in associates)
      5.) Fairfax India =        $451  =   9% (A)
      6.) Thomas Cook India = $441 = 9% (A)
      7.) CIBank - Egypt =   $402  =    8%(C)
      8.) Quess =                $346  =    7% (A)
      9.) Kennedy Wilson =  $308  =    6% (C)
      10.) Fairfax Africa =     $155  =   3% (A)
      11.) Resolute =           $123  =    2% (A)
      12.) Stelco =                $99  =    2% (C)
      13.) IIFL Wealth =         $80  =    1% (A)
      14.) IIFL Finance =        $50  =    1% (A)
      15.) IIFL Securities =     $11  =    0% (A)             

      Total 15 positions =    $5,504 =  100%

      Some takeaways:
      - the big 3: Eurobank, Seaspan and Blackberry. All 3 have interesting stories with significant upside potential.
      - the India positions have been crushed over the past year (TCI, Quess, IIFL, FIH). If they are half as undervalued as FFH thinks there is big upside potential.
      - given its very small size we can put a pitchfork in Resolute = 2.4%. Bad purchase (happens). Time to move on
      - surprised with size of CIB; looks to be very well run. Chug chug holding (solid grower).
      - KW: another chug, chug holding (solid grower)
      « Last Edit: November 06, 2019, 10:03:28 PM by Viking »