value_hunter

FFH bought $150M worth stock on Mar 7. https://ceo.ca/insiders-dashboard?symbol=ffh

I have FFH.PR.C. The reset rate will be 5 year canada bond+3.15%. Roughly 6.25% now. Definitely take 5.23% debt is much cheaper. Good move.

Is this a pattern? Every time when hit an all time high, it will quickly retreat.

Bought back 61,553 share in Aug. https://ceo.ca/api/sedi/?symbol=ffh&amount=&transaction=&insider=

Thanks for your info. Fairfax march in mortgages area with KW seems eating ALT's lunch.

Just want further expand this discussion. Nowadays more and more PE firm like APO, Blackstone, BN are buying or partnering with insurance companies. Replacing their bond portfolios with higher return private equity while still maintain their high credit rating. This seems a trend. And is also BRK's model. Ultra wealth families are allocating more and more in private equity (https://www.cnbc.com/2024/08/09/wealthy-investors-find-opportunities-in-stock-market-sell-offs-.html). All of sudden everyone seems want to buck this trend. But the beauty is Fairfax has much lower multiples than PE firm like BX, APO.

If Fairfax truly believe this type of transaction has a better risk/reward than corporate bond and not consider the credit rating impact, can it replace its bond portfolio with more of these type transactions in their sub-insurance business? Is there any regulation restriction? BRK seems are doing the same and has a disproportional high percentage of sub-business vs bond portfolio than traditional P/C insures.

Can I explain Sleepcountry's purchase like this? Fairfax treat buying and taking private equivalent as buying corporate bond. unlike buying public stock shares, this is equivalent to lock a 5.3%+ return permanently without worrying stock price fluctuations. Given Fairfax's bond portfolio return is around 5% and only lock in several years, this makes sense. The question is whether rate agency treat owning sub-business the same risk as buying corporate bond?

If Fairfax has the money, why pay interest(I assume that probably higher than 6%) for TRS and not buy back share directly?

Isn't the TRS a kind of borrowing to buy back share?

Given Fairfax's borrow cost is around 6%, any business's profit higher than that will be accretive. So even buy back share at PB 1.4, the annual return is still higher than 10% (assume PE 10). But Sleep country's return (PE 19) is just around 5%. I can't see that purchase will be accretive to Fairfax.

Can someone explain to me why it's better to buy a business (PE:19, PB: 2.5) than buy its own share (PE 7, PB 1.1)?

But why the other PC insurer, like MKL, WRB, CB don't drop that much? IFC even goes up.

More FFH as well.

They bough some in Mar. https://ceo.ca/api/sedi/?symbol=fih&amount=&transaction=&insider=

Seems Fairfax bought back $200m CAD shares in Mar. https://ceo.ca/api/sedi/?symbol=ffh&amount=&transaction=&insider=

I use this.https://ceo.ca/api/sedi/?symbol=ffh&amount=&transaction=&insider=

Actually it's cost based not fair value based. Also Canadian companies like FFH, issue foreign currency share are not treated as foreign property. https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/foreign-reporting/questions-answers-about-form-t1135.html#SFPCanadianReporting

Yahoo's estimate is C$70.74 which is USD$52. meet.

Some interesting questions: If FFH purposely overvalue their asset, will that lead a higher tax or earlier tax payment? If FFH has the motive to consistently inflate their asset value why when some chances came but they chose not to. The bottom line is whether Fairfax is trustful. I found the following comment from Seekingalpha is very interesting. https://seekingalpha.com/news/4064629-fairfax-financial-drops-amid-muddy-waters-short-report#scroll_comments Doc Hopey Yesterday, 4:53 PM Investing Group Comments (571) | + Follow @zenamaste1995 When FFH sold its Pet insurance business for $1.4 bn in late 2022, FFh had to book a gain of $1.2 bn. Fairfax bought the pet insurance business for $30 mn (or was it $50 mn? From memory) less than two deacades before the sale. Essentially nobody, not even the people following Fairfax over years, were really aware, that Fairfax even owned that business. And here’s the question: Don’t you think that creative accountants would have advertised such an asset way more than FFH did? Why haven‘t they? Were they oversleeping this $1.2 bn opportunity for letting Fairfax shine? Or is it more like, Fairfax tries to grow intrinsic value (not book value), tries to avoid taxes and is advertising way less than others over its whole history? ReplyLike(1)

Are shorts covering now? Looks like no chance to buy it cheap any more.

Do you think the TRS counterparty will benefit from the price drop? Shouldn't they already hedged on this?

Why are you concerned about KW deal? Just because of the recent price drop? Or you think the KW deal is fundamentally flawed?

Debts are 100% fixed or hedged. Plus Fairfax won't let it go under.

added KW