Author Topic: Fairfax2019  (Read 75869 times)

Cardboard

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Re: Fairfax2019
« Reply #90 on: September 28, 2019, 10:17:12 AM »
This was a bad instance but, the one that really discredited Prem for me was this "take-over" of Blackberry that never happened.

It is illegal to make a take-over offer for a public company when you don't have the means or intention to carry it through. I understand that it was subject to obtaining support from friends and all that but, I think it was a manipulative scheme while Blackberry shares were heading downhill.


petec

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Re: Fairfax2019
« Reply #91 on: September 30, 2019, 01:43:13 AM »
What is mindboggling is the decision to continue to hold Resolute Forest Products at all. And may I add...Blackberry, Eurobank, Stelco Torstar etc etc. As far as the "long term" defence for hollding these positions....with the exception of Stelco all of these positions have been held for numerous years without any positive results.

Funnily enough several of these look really interesting to me at the moment. I have developed a new rule for following Fairfax: buy what they buy, just do it several years later.
FFH MSFT BRK BAM ATCO LNG IHG TFG CGT DC/A

bearprowler6

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Re: Fairfax2019
« Reply #92 on: September 30, 2019, 06:24:38 AM »
What is mindboggling is the decision to continue to hold Resolute Forest Products at all. And may I add...Blackberry, Eurobank, Stelco Torstar etc etc. As far as the "long term" defence for hollding these positions....with the exception of Stelco all of these positions have been held for numerous years without any positive results.

Funnily enough several of these look really interesting to me at the moment. I have developed a new rule for following Fairfax: buy what they buy, just do it several years later.

Fair enough Petec....but one needs to ask why they are always so early?

In fact...they need to spend considerable time addressing this major flaw in their investment process. For example, as soon as they bought into Stelco it was pointed out by many on this board that the timing was very poor given where we were in the economic cycle and given the tariffs being levied by the Trump administration. And what happens...50% of their investment literally disappears over night.

And they were way early on Blackberry and truth be told this is not a sure thing even from this level. Full disclosure....I bought into Blackberry late last week.

Furthermore...although I might be wrong....Resolute Forest is simply a bad investment. They have had hundreds of million tied up in this loser for years. Time to admit the mistake, sell and redeploy the capital.

I could go on but I think my point has been made. I have followed Fairfax for literally decades and am a very patient investor but something is not right when you assemble a group of equity investments like the ones they hold at the prices they bought in at.

petec

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Re: Fairfax2019
« Reply #93 on: October 01, 2019, 01:53:25 AM »
Fair enough Petec....but one needs to ask why they are always so early?

I agree - that was the underlying point (perhaps not clear) of my post.

That said:

1) It's only fair to point out what they got right, like Quess and Seaspan.

2) I disagree that they should necessarily sell an investment simply because buying it was a mistake. For example FFH will never recoup their investment in RFP, but if consensus is right it will generate half of its market cap and a quarter of its enterprise value in free cash flow over the next two years.

As an aside, I think the Stelco investment will work out fine. To win when investing in bad/low ROIC businesses you need 3 things: underappreciated value; good capital allocation; and low debts (or contracted cash flows that match the debt maturities). Stelco has all three (as does Seaspan although the value is becoming more appreciated by the day).

FFH MSFT BRK BAM ATCO LNG IHG TFG CGT DC/A

KFS

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Re: Fairfax2019
« Reply #94 on: October 01, 2019, 10:09:50 AM »
Press Release Details

Fairfax Financial Holdings Limited: Intention to Make a Normal Course Issuer Bid for Subordinate Voting Shares and Preferred Shares
09/26/2019

https://www.fairfax.ca/news/press-releases/press-release-details/2019/Fairfax-Financial-Holdings-Limited-Intention-to-Make-a-Normal-Course-Issuer-Bid-for-Subordinate-Voting-Shares-and-Preferred-Shares/default.aspx


wondering

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Re: Fairfax2019
« Reply #95 on: November 14, 2019, 07:32:17 AM »
https://www.avantelogixx.com/Avante+Logixx+Secures+up+to+%2418.0+million+in+Financing+from+Well+Known+Canadian+Investor+and+To+Expand+Nationally+with+Acquisition+of+A.S.A.P.+Secured+Inc

Another convertible debenture deal,  Relatively small - total $18m Cdn. 7% interest.  If fully exercised, FFH would have 19% of the equity interest in the company.

"Avante Logixx Inc engaged in the provision of security, monitoring, system integration, and technology solutions. Its products and services include residential and corporate security business: Avante control center, monitoring, electronic building management, patrol and rapid response, intelligent perimeter protection, secure transport, international security travel advisory services, locksmith services, and smart home automation. "

investmd

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Re: Fairfax2019
« Reply #96 on: December 18, 2019, 06:09:43 AM »

This year’s catalysts

-Fairfax followers are as bearish as I have seen since 2003.

-I expect the best bond manager (Brian Bradstreet) in the world to have filled Fairfax Xmas stockings with corporate and other bonds that got trounced in December. We have seen him move very quickly in the past... 2008 he bought $7b in tax free muni’s yielding 7% in less than a month and sold almost the entire US treasury holding that was larger than that at a massive profit during the same time. In the first half of the 2000’s he did very well in corporate bonds where he needed to be nimble before 2007. I am betting on a much higher yield on Fairfax large portfolio which will take operating earnings higher. This and a likely higher shift into higher yielding short term treasuries in the fall will show more of the earnings power of Fairfax as opposed to holding 50% cash holdings.

-India’s growth remains the highest in the world and Fairfax is a way to play that

-share buyback will accelerate at these levels albeit not as big as I would like!

- insurance companies will continue to improve

-equity positions are at rock bottom with little downside risk

-as previously discussed I am unhappy with share based awards...these will be disclosed in detail by Prem.

Most importantly this is a solid business with loads of potential that is selling dirt cheap for all of the reasons discussed here. Is it a redemption year for Prem and his team at Fairfax? We will see.

-

Dazel: thanks for starting this thread at the beginning of the year and stating your conviction. It's 12 months later and I'm curious as to whether there have been adjustments to your thought process.

In another post in January you stated "2019 is all about earnings....good or bad. It is time for Fairfax to perform...if they do not I will accept it and move on. If it sounds like a broken record I appreciate the skepticism from all..."  In some ways FFH has performed - insurance side has done well, Seaspan & Eurobank - couple of their largest equity holdings have done well in past 12 months, BUT FFH stock price is essentially flat and I believe selling below book value. So what are your thoughts to close out the year?


Crip1

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Re: Fairfax2019
« Reply #98 on: December 20, 2019, 06:56:32 AM »
https://www.fairfax.ca/news/press-releases/press-release-details/2019/OMERS-to-Invest-in-RiverStone-UK/default.aspx


Was just about to post this. Although not huge, this is another example of realizing some value in their assets that was not previously reflected in BV. Wondering if this is a concerted effort or just being opportunistic. Thoughts from others who are better educated would be welcome.


-Crip

Viking

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Re: Fairfax2019
« Reply #99 on: December 20, 2019, 10:19:10 AM »
Fairfax over the years has made many purchases. What i really like about many of the transactions i am seeing this year is the company is setting units up to be more successful. It sounds like RiverStone wants to grow its business. These moves, because of the cash involved, also provide shareholders with an updated value of the business. My guess is Fairfax has more to come in the next 12 months. With FFH shares trading a little above BV i think FFH is highly motivated to unlock value. I would not be surprised to see a transaction (or a few) that brings in a chunk of cash and allows FFH to buy back a meaningful amount of FFH shares. Regarding the RiverStone transaction i am not sure if the proceeds from OMERS will be going to FFH corporate or to RiverStone to be used to grow their business.

“The cash purchase price for the RiverStone UK investment of at least US$560 million, subject to certain book value adjustments at closing, will result in Fairfax recording a gain of approximately US$280 million before tax (an increase in book value per basic share of Fairfax of approximately US$10 before tax on a pro forma basis).

Upon completion of the transaction, Fairfax will deconsolidate the UK run-off group and apply the equity method of accounting for its remaining interest. Fairfax may further monetize its remaining interest in UK run-off in the future although the company also retains the flexibility to repurchase its interest over time.”