Hoodlum
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Posts posted by Hoodlum
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Some more details of the IPO price range. This would suggest they are raising ~$310M US, if my calculation is correct. Not sure how this translates to total valuation of Go Digit.
The price band of the public offer is expected to be around Rs 258-272 per share and the company is likely to raise Rs 2,538 crore at the lower end of the price band and Rs 2,614 crore at the upper band, sources aware of the matter told Moneycontrol on the condition of anonymity.
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It looks like the actual listing date is May 23rd.
The IPO comprises of a fresh issue of Rs 1125 crores. On offer sale is up to 109,445,561 equity shares. Each of these equity shares is worth Rs 10.
The IPO will close on 17 May. The company will be listed on both National Stock Exchange and the Bombay Stock Exchange. In this, 10 per cent will be earmarked for Retail Quota. 75 per cent will be earmarked for QIB or Qualified institutional investors. In addition, 15 per cent will be for NII or Non-Institutional investors.
After closing of the IPO, refunds will be arranged on 22 May. The shares would be credited to the account on 22 May. Finally, the IPO will be listed on 23 May.
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1 hour ago, backtothebeach said:
Without doing the math, but I don’t think that’s true. Buybacks above book value actually slightly lower book value.
You are correct. -
11 minutes ago, nwoodman said:
Yep, hard to believe they squared away ~0.75% outstanding in April. They REALLY liked it <$CAD1500
https://ceo.ca/api/sedi/?symbol=FFH&amount=&transaction=&insider=
At that rate the buybacks would add $20US/qtr to the book value per share. -
Fairfax has GO digit listed as 49% ownership in their shareholders letter. But it looks like Fairfax was able to covert their debt to shares in advance of the IPO. IRDA did fine them yesterday ~$120k for non-disclosure of a change to how they were converted but it looks like it went through. This was likely the last step before going ahead with the IPO.
I still don’t see what Fairfax ownership will look like after the IPO but they will likely have majority ownership as this was a key component of the IPO for Fairfax. I would expect that Fairfax will issue a press release after the IPO announcing their new ownership share of Go Digit along with the impact on Book Value.
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IPO is expected on the 15th next week, with IPO range announcement coming in 2 days.
Go Digit General Insurance is looking to launch its initial public offering (IPO) next week, likely on Wednesday, May 15, 2024, said a report from ET Now. The company price band of the issue will be declared on Friday, May 10 and the anchor book may open on Tuesday, May 14.
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Here is the announcement of the Odyssey Re succession plan completion.
https://odysseyre.com/news/odyssey-group-announces-leadership-change/
QuoteOdyssey Reinsurance Company’s global CEO, Carl Overy, will succeed Brian Young as CEO of Odyssey Group effective January 1, 2025. This appointment coincides with Mr. Young’s move to Fairfax, where he will serve as president of Fairfax Insurance Group. Mr. Young will work alongside Andrew Barnard, who will assume the role as chairman of Fairfax Insurance Group, and, together, they will provide management oversight of Fairfax’s expansive global (re)insurance operations.
Mr. Overy will be responsible for Odyssey Group’s global operations, overseeing its three underwriting franchises: OdysseyRe, Hudson Insurance Group and Newline Group. Mr. Overy’s tenure at Odyssey Group spans more than 20 years. He was appointed global CEO of OdysseyRe in 2023 and previously served for 15 years as the CEO of Odyssey Group’s London Market Division, which encompasses both the London branch of Odyssey Reinsurance Company and Newline Group, the international insurance arm of Odyssey Group.
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It looks like a ratings upgrade may may be coming from Fitch, based on their Outlook switching from Stable to Positive.
Fitch Revises Fairfax's Outlook to Positive; Affirms Ratings -
7 minutes ago, nwoodman said:
Thanks for posting the rump of the article
. Agree there will be a hit to the bond portfolio. My guesstimate is $40 per share but not phased +\-$10. It is all moving in the right direction.
But would it be that large under IFRS reporting?
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National Bank Analyst Jaeme Gloyn increased his target to $2100 Cdn.
https://www.theglobeandmail.com/investing/markets/inside-the-market/article-tuesdays-analyst-upgrades-and-downgrades-for-april-30/?login=trueQuote“We expect continued outperformance through 2024 driven by three catalysts ... i) significantly increased operating income, ii) valuation re-rate, and iii) potential S&P/TSX 60 Index inclusion,” he said. “While we expect softer than consensus results in Q1-24, largely due to unrealized losses on fixed income assets, robust underwriting performance and outlook commentary will support our longer-term view.”
Mr. Gloyn increased his target for Fairfax shares to a Street-high of $2,100 from $2,000, keeping an “outperform” rating.
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That is interesting. So a 2% market share in just 9 months.
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18 hours ago, Viking said:
I remember when everyone thought the 10 year US Treasury yield would peak at 3%. The fact the fixed income team did not meaningfully extend duration earlier and at much lower yields is amazing.
I remember these discussions as well. Fortunately, the bond team recognized that the rate increase had a ways to go at that time.
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Congrats to Prem. Well deserved.
NEW YORK--(BUSINESS WIRE)--The International Insurance Society (IIS) has named Prem Watsa, the Founder, Chairman and CEO of Toronto-based Fairfax Financial Holdings Limited, the 2024 Insurance Hall of Fame Laureate. Mr. Watsa will be formally honored at an awards ceremony on Nov. 17, 2024 at the Hyatt Regency Miami. The awards ceremony kicks off the Global Insurance Forum, running from Nov. 17-19, 2024.
“As the 2024 Insurance Hall of Fame Laureate, Mr. Prem Watsa's legacy of excellence, ingenuity and integrity continues to inspire future generations in the insurance industry and beyond,” says Josh Landau, President of the International Insurance Society. “Mr. Watsa is a visionary leader whose wisdom and foresight have left an indelible mark on the financial landscape in Canada and across the globe.”
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Private Equity firm Birch Hill Equity is going to sell CCM and expects to sell it for a significant multiple of the $110M they paid for it in in 2017. This is interesting as CCM own 40% of the hockey equipment market and Fairfax through Bauer at Peak Achievement also own 40% of the hockey equipment market. This could provide an interesting valuation for the 43% of Peak Achievement that Fairfax has on their books for $129M ($226 Market value according to shareholder letter). Peak investment is also a minority shareholder of Rawlings that was valued at $395M in 2018, but I cannot determine the percentage of their ownership in Rawlings.
https://www.theglobeandmail.com/business/article-hockey-gear-ccm-sale-private-equity/
QuoteOn the eve of the NHL playoffs, private equity fund manager Birch Hill Equity Partners has placed CCM Hockey on the auction block. CCM, one of two dominant hockey-gear companies, is expected to fetch a price that is a significant multiple to the $110-million Birch Hill paid for the business seven years ago.
Toronto-based Birch Hill recently hired U.S. investment bank Robert W. Baird & Co. Inc. to run the potential sale, according to two sources involved in the process. The Globe and Mail is not naming the sources because they are not permitted to speak for the companies.
Birch Hill decided to shop Montreal-based CCM after receiving several unsolicited offers for the gear maker from private equity funds, the sources said. They said there is no guarantee the process will result in a sale. Spokespersons for Birch Hill, CCM and Baird declined to comment.
CCM’s potential buyers include sports equipment manufacturers and large private equity funds, according to the sources. One said Birch Hill expects to conclude the process, with or without a sale, by the summer, to avoid a prolonged period of uncertainty around ownership. According to a recent press release, CCM has 500 employees.
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It looks like the loan to IIFL is for 3 years @ 9.5%
https://economictimes.indiatimes.com/industry/banking/finance/fairfax-arm-infuses-rs-500-crore-into-iifl-finance/articleshow/109323304.cms -
38 minutes ago, ValueMaven said:
Very odd - FRFHF opened down nearly -4% today in the US Market. Was able to add more in size around the ~$1055 level USD. Just very odd opening action in the first 10-15mins of trading. Has since normalized a bit.
FFH was also down 2.5% at the open. The CAD to US exchange rate had a large drop with CAD dollar dropping almost 2% over past 2 days. So there was likely an exchange rate adjustment on the stock this morning as well.
I picked up some more as well after the open.
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31 minutes ago, SafetyinNumbers said:
Can you see how much he changed his earnings estimates?I cannot as I don't have access.
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Our friend Brett has raised his target from $970 to 1180 cdn. I don’t know how he can reconcile the stock being overvalued at $970, yet increase the target by $210. He will need to do it again before long.
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14 minutes ago, Thrifty3000 said:
From Jamie Dimon's annual letter...
"we are prepared for a very broad range of interest rates, from 2% to 8% or even more"
Notice he didn't say from 0% to 8% or even more.
I believe recency bias accounts for much of Fairfax's discount to intrinsic value. Lot's of people heavily weight a return to zirp scenario in their longer term Fairfax model. Dimon lays out why he thinks 0% is off the table and why a higher rate environment is the more likely scenario.
If Dimon is on the right track about rates then it seems baseline EPS estimates for FFH will be shifting closer to $200 as more investors/analysts' take zirp off the table and increase their expected portfolio yield by a couple hundred basis points.
I am also in alignment with Jamie's comments here as it related to inflation and interest rates. It will take time for the market to completely grasp this and what it will mean for investments. Long term we will see the Fed revisit the 2% inflation target but that will take more than 5 years and by then it won't be a surprise. I could see them go back to an inflation target range.
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5 minutes ago, giulio said:
Will he give up when Digit goes public? The COBF should make a bet with him wrt Digit value/valuation.
This is just a rehash of their February report, so I guess they couldn't find anything else. Digit represented $1.1b of their suggest $4.5b book adjustment, so yes an IPO at a good value would effectively squash their thesis and kill any credibility that people may still have in them.
https://www.muddywatersresearch.com/wp-content/uploads/2024/02/Fairfax-Financial_FFH_MW_20240208.pdf
QuoteMuddy Waters is short Fairfax Financial Holdings Limited (FFH:CN) because we find that Fairfax has consistently manipulated asset values and income by engaging in often value destructive transactions to produce accounting gains. We believe a conservative adjustment to book value should be ~-$4.5 billion or ~-18% lower than reported. We see Fairfax as far more akin to GE than to Berkshire Hathaway.
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44 minutes ago, Viking said:
@Hamburg Investor i don’t have a lot of insight as to why P/C insurers trade at the multiples they do compared to other industries and the market as a whole.
P/C insurance is a pretty small sector and i don’t think it is followed all that closely by most investors.
But i think i can spot cheap. Fairfax is trading at about 1.1 x BV (est March 31, 2024) or at a PE of 6.5 x (est 2024 earnings).
Of all the valuation measures, P/BV appears to be the most important. Multiple expansion has been happening for Fairfax over the past couple of years - investors are warming to the Fairfax story. If Fairfax continues to deliver solid results in 2024 and 2025 my guess is we will see multiple expansion continue.
I think PE has become a more useful measure of the valuation for Fairfax once they locked in the treasuries for the next 4 years. Also, their equity investment side of the business should provide fewer gyrations to the BV going forward. This all provides some stability to the earnings. I think there are still a couple of historical factors that have held back the valuation of Fairfax.
Most investors don't spend the time needed to properly evaluate a P&C company and so a lot of their valuation is based on historical context (ie. Blackberry investment, book value not being stable, poor running Insurance businesses). In some ways we may need a bad hurricane season for investors to recognize just how well our insurance businesses are operating in comparison to other P&C companies. The PE will eventually be reflected in the stock price and while I have no idea as to when that will occur, it will likely happen quickly once it gets started.
Higher inflation and interest rates is another area where many investors/analysts are still looking a more recent (past 15+ years) for historical precedence and are expecting both to come back down to some degree. It will take some time but eventually the market will realize that the Supply Chain issues and the US printing money are not going away and this will help drive the higher inflation/interest rates. This will then get reflected in higher valuations for Fairfax and other P&C companies as they will benefit from this. -
25 minutes ago, glider3834 said:
it looks like Fairfax invested a total of $24M US in 2018/19 for their 50% ownership of Onlia. I have not found any other mention of this investment since then so I have no idea of its current value. -
27 minutes ago, MMM20 said:
Why does higher volume imply shorts adding?
While it doesn’t necessarily equate, but shorts need to sell borrowed share to add to their position. It could also be some large blocks trading for another reason.
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Today’s trading volume in the US and CA was double the average and much higher than last week. I wonder if more shorts are getting added.
Digit
in Fairfax Financial
Posted
Here on some additional comments from Kamesh Goyal on their decision to lower the IPO price. They also decided to reduce number of shares on offer by 40%, as non-convertible debt secured in December has reduced the need for additional funding.
https://www.moneycontrol.com/news/business/go-digits-kamesh-goyal-says-we-took-investor-feedback-to-decide-the-ipo-price-hope-to-give-them-value-12719353.html