glider3834

I would suspect CAD weakening close to 1% against USD

I just sent an email to morningstar as well

well picked up - I highlighted in yellow from original press release from Fairfax below

yep the narrative - I looked at the chart & thought it looked odd

great response- liked '“We are neither Berkshire Hathaway, nor GE, as Muddy Waters suggests. We are Fairfax..."

Looking at MW chart table below for years 2017-22 - how does that reconcile with Fairfax's number from their 2022 Annual report for 2017-22 period? Or am I missing something?

cheers Viking - looks like Fairfax were carrying the equity portion of 58% AGT stake at $57M in 2020 & then in 2022 it is potentially included in 'other consolidated' category but we can't confirm as this is not broken out 2020 AR 2022 AR

Looks like Chou Associates Mgmt retained Kroll LLC to provide an independent valuation of their Exco shares at 31 Dec-22 & mean price was US$21.08 per share. This is above Fairfax's carrying value of Exco of US$12.59 per share at 31 Dec-22. https://www.osc.ca/en/securities-law/orders-rulings-decisions/chou-associates-management-inc-and-chou-associates-fund-0 See below comment on OTC market pricing of Exco shares

From a valuation perspective, here is an interesting recent M&A/transaction comp for Digit. In Nov-23 Zurich agreed to acquire 51% of Kotak General Insurance for US$487M for an implied valuation for 100% of Kotak General Insurance of ~US$955M https://asiainsurancepost.com/archives/48809 https://yourstory.com/2023/11/zurich-insurance-to-buy-51-pc-of-kotak-general-insurance Digit is writing about 5x more GPW than Kotak YTD & 4x more GPW for current month. Digit has ~2.76% market share vs Kotak's ~0.52% mkt share according to recent flash figures below (below) - Digit's YTD growth rate is 32% vs Kotak's 41%, but Kotak is also coming off a smaller premium base.

https://www.godigit.com/digest/stories/digit-funding-press-release The key word is IFRS - Fairfax reports Digit results under IFRS but Digit reports under Indian GAAP. As per below, there are 'significant differences'. Below Digit indicate that they cannot by law include IFRS Financials in their IPO Prospectus (excerpt below), but they plan to make IFRS financial data available after IPO for ease of comparison with other global companies in the same industry.

I think where it was similar was more on quant side but learnings with Fairfax have been more on qualitative side - importance of quality of management and corporate culture I had a re-listen to Ian Kelly point on mean reversion skepticism - I think what he is saying is that as they look under the hood at the cheapest subset of value stocks in Europe they are seeing more companies that have genuine problems ie they haven't just underperformed (relative to growth ) purely due to slower growth (ie cyclical factors) but other underlying drivers of business performance have changed - so they wouldn't expect the margins to mean revert as economy gets better ie the underlying value has degraded (my word) in a sense - thats my 2 cents worth take anyway...

this looks like an interesting article if you are a subscriber https://www.insuranceinsider.com/article/2csob28o7eht496cy1tz4/london-market-section/brits-thompson-resetting-for-a-lead-position

in the interview Jamie L mentions a book he gave to Prem W on Teledyne - A Distant Force - ~$521 at Amazon - too expensive for me but I would like to read it https://www.amazon.com.au/Distant-Force-Teledyne-Corporation-Created/dp/097913630X

Cheers! @Maverick47 @nwoodman

podcast with European investment team at Fairfax

Fairfax buying back shares in Dec

They now have significant control of Swan Topco - shareholding % not available - which in turn owns 100% of Meadow Foods which is the main subsidiary Below excerpts from Mar-23 consolidated financials publicly available here for Swan Topco https://find-and-update.company-information.service.gov.uk/company/11436426/filing-history It looks to be generating positive & growing net operating cash flows YoY which are being used to repay interest and repay debt (but not sure what capital structure will be post Fairfax acquisition). Swan Topco appears to have a non-cash acquisition related, goodwill amortisation exp of GBP26M , which is depressing operating profit, but gets added back to operating cash flows.

re your questions - might find useful this interview with Ben Watsa https://vimeo.com/862872315

+1 my thoughts are - it rewards Prem, FFH mgmt & staff who own FFH shares after excellent operating results in a way that is shareholder aligned - thats positive - it attracts investors to Fairfax that are focused on dividend yield and/or companies that are increasing dividends - that potentially impacts multiple & potentially could increase the value of the TRS position - it suggests confidence by Fairfax mgmt in earnings forecasts and cash generation going forward - again that can impact investor psychology and impact Fairfax multiple & the value of TRS position - 8.5% of the dividend should effectively flow back to Fairfax due to TRS on 1.96M shares the benefits above outweigh any additional tax considerations IMHO

yes T2 funded mostly with debt and to lesser extent operating cash flow over FY22 & FY23 (see below) . Going forward, Operating cash inflow /EBITDA should grow with traffic increasing. Its tricky looking at BIAL valuation through a PE lens because the reality is most of the profitability is likely to happen further out - airport project finance naturally has significant capex upfront (to build new terminals, runways etc) & significant fixed overhead as a result with depreciation, insurances etc. So we currently have these high overhead costs spread over lower (than potential) passenger numbers (T2 I gather is around 50% of passenger volume capacity) & so in the short term that impacts profitability (note the FY23 profit uplift was impacted by a tax benefit). As passenger numbers build over time, we should see lower fixed overhead per passenger as operating leverage comes into play.

https://www.travelandtourworld.com/news/article/blr-airport-best-domestic-airport-2023/

Underlying ownership Fairfax has 59% and OMERS 5% - it gets consolidated in FIH books with 64% BIAL controlling stake as Asset and 5% non-controlling interest in Equity.

+1 their TRS has generated ~US$600M YTD before swap fees & assuming its still open - so I would add that to list