Hoodlum

IPO is expected on the 15th next week, with IPO range announcement coming in 2 days. https://www.businesstoday.in/amp/markets/ipo-corner/story/virat-kohli-backed-go-digit-may-launch-ipo-next-week-here-are-key-details-428682-2024-05-08 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.

Here is the announcement of the Odyssey Re succession plan completion. https://odysseyre.com/news/odyssey-group-announces-leadership-change/

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

But would it be that large under IFRS reporting?

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=true

That is interesting. So a 2% market share in just 9 months.

I remember these discussions as well. Fortunately, the bond team recognized that the rate increase had a ways to go at that time.

Congrats to Prem. Well deserved. https://www.businesswire.com/news/home/20240418306017/en/Prem-Watsa-Named-2024-Insurance-Hall-of-Fame-Laureate 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.”

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/

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

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.

I cannot as I don't have access.

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. https://www.morningstar.com/company-reports/1216921-fairfax-increasing-our-fair-value-estimate?listing=0P00006821

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.

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

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.

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.

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.

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.

Someone needs to ask Prem at the AGM about Micron as an AI play.

Fairfax is offering $1B in 30yr notes at 6.35%. Is this replacing existing debt or do they have other plans for this? https://www.fairfax.ca/press-releases/fairfax-announces-pricing-of-senior-notes-offering-03-19-2024/

Farmers Edge deal will close on Thursday. https://www.newswire.ca/news-releases/farmers-edge-obtains-final-court-order-approving-plan-of-arrangement-831538915.html

Fairfax sweetens the deal for IDBI Bank

But wouldn’t Fairfax’s larger float at least somewhat negate this advantage during a really bad cat year.

Trading over $1500 cdn for the first time. Next stop is $2000cdn/$1500US, maybe both of these Cdn/US milestones will occur on the same day.