Author Topic: Fairfax stock positions  (Read 31250 times)

Viking

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Re: Fairfax stock positions
« Reply #60 on: December 12, 2019, 10:30:33 AM »
Fairfax’s second largest investment is Eurobank. The recent election of a pro-business government (and the fact they secured a majority) is a big deal. For Eurobank, positive that ‘Hercules’ plan is moving forward (will remove a large chunk of non-performing loans from balance sheet of banks). Real estate prices are up 7% year over year; expected to increase at faster rate over next year; also very positive for banks (their main form of colateral). While Greece continues to have its share of issues, it does look to be improving with an improving outlook and this bodes well for Eurobank stock in the coming years.

Dec.09 -- Alex Patelis, chief economic adviser to Greek Prime Minister Kyriakos Mitsotakis, discusses his expectations for Greece's economy and the Hercules plan. He speaks on "Bloomberg Markets: European Close."
- https://www.msn.com/en-us/money/videos/greece-could-cut-np-stock-by-half-with-hercules-scheme-patelis-says/vi-BBY0t8W
« Last Edit: December 12, 2019, 10:37:52 AM by Viking »


Viking

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Re: Fairfax stock positions
« Reply #61 on: December 16, 2019, 03:09:17 PM »
Here is an update of Fairfax’s Seaspan investment as of today:
1.) $500 million / $6.50 per share = 77 million shares
- $14 (share price today) - $6.50 (cost) = $7.50 = $578 million
- investment was made in two stages; 1/2 in early 2018 and 1/2 in early 2019
2.) 25 million warrants: $14 - $8.05 (exercise price) = $5.95 x 25 mill shares = $149 million
- awarded early 2019
- not sure how FFH values these as i dont think they have been exercised

3.) APR Energy: $300 mill / $11.10 per share = 27 million shares
- $14 (share price today) - $11.10 (cost) = $2.90 x 27 million shares = $78 million
- my estimate of what FFH will get when deal closes in Q1 2020 (deal was announced Nov 2019)

Bottom line, as of today FFH is up on its Seaspan investment (since inception) $578 + $149 + $78 = $805 million. Yes, it is a paper gain as Seaspan looks to be a long term hold. It does demonstrate how FFH swings for the fences when it invests. And when it connects the returns can be very good (in thiscase 24 months later).

4.) senior notes 2023 = $500 million at 5.5% = $27.5 million interest income each year

This part of their investment is icing on the cake.

On Sept 30 Seaspan was trading at $10.63. Trading at about $14 today stock is up 32% in past 10 weeks.
« Last Edit: December 16, 2019, 03:27:16 PM by Viking »

petec

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Re: Fairfax stock positions
« Reply #62 on: December 17, 2019, 12:41:01 AM »
Here is an update of Fairfax’s Seaspan investment as of today:
1.) $500 million / $6.50 per share = 77 million shares
- $14 (share price today) - $6.50 (cost) = $7.50 = $578 million
- investment was made in two stages; 1/2 in early 2018 and 1/2 in early 2019
2.) 25 million warrants: $14 - $8.05 (exercise price) = $5.95 x 25 mill shares = $149 million
- awarded early 2019
- not sure how FFH values these as i dont think they have been exercised

3.) APR Energy: $300 mill / $11.10 per share = 27 million shares
- $14 (share price today) - $11.10 (cost) = $2.90 x 27 million shares = $78 million
- my estimate of what FFH will get when deal closes in Q1 2020 (deal was announced Nov 2019)

Bottom line, as of today FFH is up on its Seaspan investment (since inception) $578 + $149 + $78 = $805 million. Yes, it is a paper gain as Seaspan looks to be a long term hold. It does demonstrate how FFH swings for the fences when it invests. And when it connects the returns can be very good (in thiscase 24 months later).

4.) senior notes 2023 = $500 million at 5.5% = $27.5 million interest income each year

This part of their investment is icing on the cake.

On Sept 30 Seaspan was trading at $10.63. Trading at about $14 today stock is up 32% in past 10 weeks.

It's been a spectacular investment.

I posted an updated valuation on the SSW thread yesterday, if that's of interest.
FFH MSFT BRK BAM ATCO LNG IHG TFG CGT DC/A

Xerxes

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Re: Fairfax stock positions
« Reply #63 on: January 06, 2020, 08:19:36 PM »
Howdy folks,
My new year resolution has been to join this board and stop being cheap (the $29 fee) and start to contribute to a great forum that I have been over-learning from.
So I joined:

I will add this company as well to this list of FFH's holding: AGT Food and Ingredients.
It was taken private a while back. Here is an article from earlier this year on how the likes of Beyond Meat are creating more demand for AGT Foods. Unrelated to peas, the podcast talks also about how their (AGT/FFH) control of railway to the Port of Churchill present them with a nice long-term play real option (as Arctic recedes) as that is the only major railway heading that way, and IIRC Churchill is the only Arctic port on the Canadian side .. vs .. several or so on the Russian side.

https://business.financialpost.com/commodities/agriculture/peas

Here is the CEO on podcast with the Canadian Club of Toronto that I had found to be super interesting. You will find many other interesting podcasts well.
 
https://player.fm/series/series-2416203/murad-al-katib-president-and-ceo-agt-food-and-ingredients-inc


Sombunall

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Re: Fairfax stock positions
« Reply #64 on: January 07, 2020, 04:59:35 AM »
Welcome Xerxes. And thank you for this. I look forward to your future contributions!

Viking

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Re: Fairfax stock positions
« Reply #65 on: February 07, 2020, 08:39:53 PM »
Question. At Dec 31, 2018 what was Fairfax's 2nd largest equity holding? My guess is most board members would get this question wrong (even if given multiple guesses).

Answer: BDT Capital Partners (Oak Fund) = $443 million
Source: Fairfax 2018 Annual Meeting presentation
Currently, after Seaspan and Eurobank, BDT Capital Partners is likely Fairfax's third largest equity holding.
A year earlier (Dec 31, 2017) its value was $355 million (#5 in equity holding that year)
Given Fairfax has about $10-$11 billion in equity holdings this one represents about a 4% position.

I tried to find information on the fund in Fairfax quarterly and annual reports but am striking out. So I am assuming they still hold their position :-). Interesting holding. Not domiciled in India. Not in a declining industry... Looks like a quality holding with well regarded management. Byron Trott (founder and CEO) used to work at Goldman Sacks where he was Warren Buffett's private banker. Anyone have any information on the company and/or the Oak Fund (what it owns)?

Who are they? "BDT Capital Partners, LLC is a private equity arm of BDT & Company, LLC, specializing in investments in family-owned and entrepreneurial businesses. It also co-invests. BDT Capital Partners, LLC was founded in 2009 and is based in Chicago, Illinois."

Here is an article: https://heavy.com/news/2019/06/bdt-capital-partners/
« Last Edit: February 07, 2020, 11:47:48 PM by Viking »

petec

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Re: Fairfax stock positions
« Reply #66 on: February 08, 2020, 12:20:51 AM »
Question. At Dec 31, 2018 what was Fairfax's 2nd largest equity holding? My guess is most board members would get this question wrong (even if given multiple guesses).

Answer: BDT Capital Partners (Oak Fund) = $443 million
Source: Fairfax 2018 Annual Meeting presentation
Currently, after Seaspan and Eurobank, BDT Capital Partners is likely Fairfax's third largest equity holding.
A year earlier (Dec 31, 2017) its value was $355 million (#5 in equity holding that year)
Given Fairfax has about $10-$11 billion in equity holdings this one represents about a 4% position.

I tried to find information on the fund in Fairfax quarterly and annual reports but am striking out. So I am assuming they still hold their position :-). Interesting holding. Not domiciled in India. Not in a declining industry... Looks like a quality holding with well regarded management. Byron Trott (founder and CEO) used to work at Goldman Sacks where he was Warren Buffett's private banker. Anyone have any information on the company and/or the Oak Fund (what it owns)?

Who are they? "BDT Capital Partners, LLC is a private equity arm of BDT & Company, LLC, specializing in investments in family-owned and entrepreneurial businesses. It also co-invests. BDT Capital Partners, LLC was founded in 2009 and is based in Chicago, Illinois."

Here is an article: https://heavy.com/news/2019/06/bdt-capital-partners/

3rd largest, not 2nd! You had me confused for a sec!
FFH MSFT BRK BAM ATCO LNG IHG TFG CGT DC/A

Xerxes

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Re: Fairfax stock positions
« Reply #67 on: February 08, 2020, 05:46:29 PM »
Toys R us was bought for $300 million in early 2018.
2-3 years later, i imagine that at the very least this might have gained some value, given that it was bought at distress price.

i think that would make it contender for 3rd spot as illiquid as it is.

petec

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Re: Fairfax stock positions
« Reply #68 on: February 09, 2020, 02:01:39 AM »
Toys R us was bought for $300 million in early 2018.
2-3 years later, i imagine that at the very least this might have gained some value, given that it was bought at distress price.

i think that would make it contender for 3rd spot as illiquid as it is.

I think the best that comes from TrU is that they extract cash while it still generates some and then sell the real estate for more than the price the paid. I don’t think it’s getting marked up.
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Viking

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Re: Fairfax stock positions
« Reply #69 on: February 09, 2020, 11:29:59 AM »
Here is my guess for Fairfax’s largest equity holdings (US$) at Dec 31, 2019. Fairfax has a total of $10 to $11 billion in equity investments. Please point out any errors you see :-) or values that look incorrect.
1.) Eurobank              $1,255 - MTM
2.) Seaspan               $1,096 - MTM (not included: APR = $381; warrants = $355)
3.) BDT Capital Partners $500 - Guess (Dec 31, 2018 = $443)
4.) Recipe                     $404 - MTM
5.) Commerce International Bank $395 - MTM
6.) Quess                     $324 - MTM
7.) Blackberry               $300 - MTM (not include: convertible bonds which doubles share count)
8.) Kennedy Wilson       $297 - MTM
9.) Toys R Us              $234 - Guess (purchase price = US$234)
10.) Thomas Cook India  $222 - MTM

Seaspan and Quess are not captured mark-to-market in Fairfax’s financials. Quess MTM value is considerably less than where it is carried on FFH financial statements (carried at $1 billion which i think is pre-demerger from 67% owned Thomas Cook and their 71 million shares) and Seaspan is the opposite. In Q3 fair value of Investment in Associates was $600 million below carried value; this should shrink considerably when the Q4 report comes out.

Not included:
Fairfax India                 $660 - MTM (largest investment Bangalore Airport)
Fairfax Africa                $208 - MTM

Others to research/watch (a few of these would likely make it in to the top 10 if we knew their current value).
Digit: Fairfax’s stake may be worth $400 million
AGT: Fairfax owns 59.6%
Peak Achievement (Bauer/Easton)
Dexterra (formerly Carillion)
Farmers Edge: Fairfax has invested $159 million
KWF Real Estate LP’s
KWF Ireland
Exco Resources   $221 fair value (42.8% equity ownership); June 8 ‘19 emerged from bankruptcy protection
« Last Edit: February 09, 2020, 09:56:56 PM by Viking »