Author Topic: Fairfax stock positions  (Read 23112 times)

petec

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Re: Fairfax stock positions
« Reply #40 on: November 07, 2019, 01:19:11 AM »
Thanks, Viking. This tallies with my version and you caught some CIB shares I had missed.

Couple of thoughts:
1) You're double counting Quess - it hasn't spun off from TCIL yet.
2) I think you ought to subtract the cost of exercising the SSW warrants ($8.05 per share). So the value of the warrants is 25*(11.32-8.05).

I see Exco has relisted. The stake is worth $10m. Another epic win :(


petec

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Re: Fairfax stock positions
« Reply #41 on: November 07, 2019, 01:34:07 AM »
Incidentally I see that Recipe recently bought a decent chunk of its shares from FFH, who slightly more bought from the family; the net result is FFH owns slightly more shares and has an additional 4% of the equity, getting them to 48%. Recipe has also been adding to its stake in The Keg Income Fund and now have 29%.

petec

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Re: Fairfax stock positions
« Reply #42 on: November 07, 2019, 11:10:28 PM »
Good set of results from SSW overnight. Accounting earnings were below expectations but operating results were superb (highest ever utilisation, costs down etc.) and cash flows continue to track towards $500m FCF to common excluding the big one off in q2. That puts the stock on a free cash flow yield of over 20%. Cash flows are growing as they pay down high cost debt/prefs and the company is highly liquid given the new debt facility they announced in q2, so expect them to ramp up acquisitions as they find targets that meet their requirements. Market remains tight and shipping rate commentary is positive.

thrifty

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Re: Fairfax stock positions
« Reply #43 on: November 09, 2019, 12:41:03 PM »
Pete this thread is so useful. Thank you so much.

Do you have more comments in SSW? What's their NAV for example in your calculation and what's your reason(s) to make it your biggest holding? How does it compare to cheaper names such as GSL in your opinion?

Thanks again.

petec

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Re: Fairfax stock positions
« Reply #44 on: November 18, 2019, 01:20:48 AM »
Pete this thread is so useful. Thank you so much.

Pleasure, and glad you find it helpful.

Do you have more comments in SSW? What's their NAV for example in your calculation and what's your reason(s) to make it your biggest holding? How does it compare to cheaper names such as GSL in your opinion?

SSW isn't my biggest position and never had been, but it's a decent size. I've discussed it in some detail on the SSW thread but in short, what interests me is that I can buy 20c of free cash flow for every $1 I spend on the shares, and that FCF sits in the hands of an outstanding capital allocator. Clearly in an operationally and financially levered business, cash flows can be volatile. Two things give me some confidence here: the industry's record-low order book, and SSW's contracts, although I expect these to shorten over time. I don't look so much at NAV for various reasons and I haven't compared SSW to peers because I regard the management element as central to the thesis.

I did lighten up the position at about $11.50, and would add to it if it fell sharply on e.g. macro concerns. They are running the business beautifully (safety rates, occupancy, innovative financing and contract structures - all matter because the customer base has consolidated and they want high quality providers). I think they have a great opportunity to consolidate their industry accretively and branch out into related industries. As a result the capacity to compound value per share at an attractive rate is immense, but the share price won't be a smooth ride and I hope to add rather than detract value by flexing the position size over time.



petec

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Re: Fairfax stock positions
« Reply #45 on: November 18, 2019, 01:54:49 PM »
Fairfax appears to be reducing Eurobank. Bloomberg says that in an emailed statement the bank announced Fairfax’s voting rights had fallen below one third, to 1.160m. I assume that means they’re selling shares.

TwoCitiesCapital

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Re: Fairfax stock positions
« Reply #46 on: November 18, 2019, 06:14:54 PM »
Fairfax appears to be reducing Eurobank. Bloomberg says that in an emailed statement the bank announced Fairfax’s voting rights had fallen below one third, to 1.160m. I assume that means they’re selling shares.

Held for years. Diluted to Oblivion. Re-upped their capital commitment. Held for more years. And then they reduce right before the real money seems it's going to be made?

Seems odd.

petec

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Re: Fairfax stock positions
« Reply #47 on: November 18, 2019, 11:36:38 PM »
Fairfax appears to be reducing Eurobank. Bloomberg says that in an emailed statement the bank announced Fairfax’s voting rights had fallen below one third, to 1.160m. I assume that means they’re selling shares.

Held for years. Diluted to Oblivion. Re-upped their capital commitment. Held for more years. And then they reduce right before the real money seems it's going to be made?

Seems odd.

It does. In reality it’s a tiny reduction but I agree it feels like they’re leaving a lot on the table.

petec

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Re: Fairfax stock positions
« Reply #48 on: November 24, 2019, 12:07:20 AM »
For those not watching the Seaspan thread, Fairfax have sold their private holding APR to Seaspan. APR owns and leases rapid-deployment power generation units so this gives Seaspan an entirely new vertical. It also increases Fairfax's position in Seaspan still further. The deal appears to be done at Fairfax's current carrying value for APR (67.9% stake * $425m equity value = $298m APR valuation at YE18) so no gain for Fairfax, but it does boost dividend income (I don't think APR paid a divi as it needed all its cash flows to reduce debt; Seaspan shares do pay a dividend). I have not yet listened to the Seaspan investor day which was held on Friday but I believe they said they bought APR for less than 5x ebitda and gave reasons for why it would do better under Seaspan than Fairfax.

Seaspan will convert to a holding company (Atlas) and aims to continue diversifying in hard asset asset management under Sokol. I think Seaspan, Recipe, FIH, and FIH can all be viewed as long term Fairfax partnerships in their respective niches.

petec

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Re: Fairfax stock positions
« Reply #49 on: December 04, 2019, 08:00:52 AM »
I had a feeling this might happen: with Thomas Cook in bankruptcy, Thomas Cook India has bought the rights to the brand for about $2m. Previously their right to use the brand was set to expire in a few years.

EDIT: Actually I think they only bought it in certain countries. They didn't buy it in India - someone else paid $13m, which suggests TCIL don't think the brand is very valuable.
« Last Edit: December 10, 2019, 01:15:09 AM by petec »