Author Topic: zenith  (Read 18563 times)

Rabbitisrich

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Re: zenith
« Reply #20 on: February 18, 2010, 07:39:50 AM »
Well said T-Bone. When the controlling shareholder transparently and honestly communicates his views about the dividend, then caveat emptor. We might lose a bit on tax inefficiencies, but that is hugely overwhelmed by the benefits of aligned incentives.


longinvestor

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  • Never interrupt compounding unnecessarily -Munger
Re: zenith
« Reply #21 on: February 18, 2010, 07:40:54 AM »
I'm not happy about the dividend either, but I must repeat what I have said before . . . I think people are way too hard on this company considering that FFH is run in a more shareholder friendly manner than 95-99% of the other companies out there.
Yes I am a shareholder and expect to be treated fairly, but I do not forget that Prem and everyone else at FFH is creating wealth and value for me - not the other way around!
From my understanding Prem does not lead and extravagant lifestyle by any means, and if he did I would not begrudge him that at all! If you would prefer that Prem paid himseld and other insiders multi-million dollar salaries rather than pay dividends that every owner receives equally then go invest in Goldman Sachs. I don't mean this to be offensive or to start an argument, I just think that we are lucky to be able to invest in a company like FFH - not the other way around. 
Prem has said on numerous occasions that he holds all the votes, wouldn't sell-out for 4 times book and that if you don't like it don't invest.
Well said. With increasing dividends and Mr Market always in catch-up mode when it comes to pricing the stock, the "fortress" of FFH ownership gets reinforced each time. The consensus will get cheerier. Just have to wait. A combination of a growing book, a small float of shares, a small lot of wildly loyal and long term holders will ensure this. If doubters get filtered out along the way, that's a good thing.  

ourkid8

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Re: zenith
« Reply #22 on: February 18, 2010, 07:51:23 AM »
I am definitely not trying to start an argument at all and do not want to discuss the merits in my fairfax position... (It's my largest position in my portfolio)

1.  I could not agree more, Fairfax is one of the most shareholder friendly companies around...

2.  I defintiely would not want Prem to pay himself and other insiders on the same scale as GS... (That bonus structure makes me SICK) I also feel Fairfax is not paying Mr. Watsa a fair wage as he requires money from other sources. I will be the first to let the company know to bump up  his salary as he definitely earns it and let's pay him a fair wage so that he does not need to supplement his income from Fairfax dividends!

Thanks,

S

I'm not happy about the dividend either, but I must repeat what I have said before . . . I think people are way too hard on this company considering that FFH is run in a more shareholder friendly manner than 95-99% of the other companies out there.

Yes I am a shareholder and expect to be treated fairly, but I do not forget that Prem and everyone else at FFH is creating wealth and value for me - not the other way around!

From my understanding Prem does not lead and extravagant lifestyle by any means, and if he did I would not begrudge him that at all! If you would prefer that Prem paid himseld and other insiders multi-million dollar salaries rather than pay dividends that every owner receives equally then go invest in Goldman Sachs. I don't mean this to be offensive or to start an argument, I just think that we are lucky to be able to invest in a company like FFH - not the other way around. 

Prem has said on numerous occasions that he holds all the votes, wouldn't sell-out for 4 times book and that if you don't like it don't invest.

Dazel

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Re: zenith
« Reply #23 on: February 18, 2010, 08:17:12 AM »

It will likely be another preferred share offering (equity  $200m)...well worth it.

I looked at Zenith and its 7% dividend at the time and did not invest ($21 a share)...sad to say. Their portfolio is a cash equivalent and those that have been around recall that Stanley Zax is a rock star. In 2004, he had a purple suit on at the Fairfax annual. Zenith was the home run hitter at that time and he was the envy of the other subs managers. I am very happy with this deal. For the Buffett followers...Buffet had a position in Zenith at that time.

Dazel.

Grenville

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Re: zenith
« Reply #24 on: February 18, 2010, 08:19:40 AM »

It will likely be another preferred share offering (equity  $200m)...well worth it.

I looked at Zenith and its 7% dividend at the time and did not invest ($21 a share)...sad to say. Their portfolio is a cash equivalent and those that have been around recall that Stanley Zax is a rock star. In 2004, he had a purple suit on at the Fairfax annual. Zenith was the home run hitter at that time and he was the envy of the other subs managers. I am very happy with this deal. For the Buffett followers...Buffet had a position in Zenith at that time.

Dazel.

Dazel, thanks for the color! Pretty interesting.

Viking

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Re: zenith
« Reply #25 on: February 18, 2010, 08:27:27 AM »
FFH has certainly been opportunistic over the past year with their purchases. They continue to get larger and diversify their business, which for an insurer is a very good thing. They also need to grow in the US and it was nice to see them talking about synergies with C&F (I expect C&F underwriting results to be less than stellar in Q4).

One red flag I see with this purchase is if they do not have enough cash at the holding company to repurchase their own shares when the next sell off comes (perhaps volatility will decline now that there is no US listing). I would not be surprised to see them raise more $ later this year should the capital markets be willing to give it to them at low cost. My guess is we will find out that Zenith has significant dividend capacity.

On a separate note, I have no issue with the dividend that FFH pays because they have communicated quite clearly for many years that they will pay a dividend and its size will be driven by results. They are simply doing what they say they will do and I will not fault them for that.

Alekbaylee

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Re: zenith
« Reply #26 on: February 18, 2010, 08:33:06 AM »
Following the completion of the acquisition, Fairfax expects to continue to maintain approximately $1.0 billion in cash and marketable securities at the holding company level[/i]

This looks good to me.

Alek

Parsad

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Re: zenith
« Reply #27 on: February 18, 2010, 08:59:41 AM »
Congratulations on the detective work guys!  I'm sure there will be plenty to talk about in Toronto this year.  Cheers!

No man is a failure who has friends!

Uccmal

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Re: zenith
« Reply #28 on: February 18, 2010, 09:01:27 AM »
I think this is a phenomenal investment.  Aside from NB and ORH it is the best ever!

The 200 Million is an easy raise using preferred shares and the demand for them is insatiable in Canada from Blue Chip Companies.
GARP tending toward value

KFRCanuk

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Re: zenith
« Reply #29 on: February 18, 2010, 09:23:48 AM »
Can I swear?

FFH puts sucked my thumb.
ORH buy back sucked my thumb.
Buying zenith (not sucking thumb) priceless!

Ok Maybe not priceless but a kewl 25.7%
« Last Edit: February 18, 2010, 09:27:45 AM by KFRCanuk »