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Fairfax Stock this week


Tommm50

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My apologies everybody. My flair for the dramatic seems to have offended the sensibilities of everyone that has a flair for accuracy.

 

SD got it best when he wrote:

 

 

Even we don't think we'll see .6x BV, but we see the argument.

     

 

My point is that FFH has traded at wonderful discounts in the not so distant past and in all likelihood will do so again in the future.

 

Here is my official stance. 

 

1.) Hold a permanent long position

2.) Have a trading position which you buy when you feel FFH is trading at a discount to book and wait for 1/4ly numbers for it to adjust back to book value.

 

Taking a position that is speculative waiting for multiple expansion isn't wise in my opinion.

 

That's it.

 

Cheers. ;)

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I do not have a clue if MR. Mkt will attach a greater or lesser value to FFH earnings  and BV going forward however I am starting to see a trend developing where the clubby group of FFH long-term shareholders is starting to be replaced by shareholders who might be willing to pay a higher relative price for the stock. Lets face it we are collectively far to cheap to ever pay a premium price for our beloved FFH. I also suspect given the increase in liquidity that has been orchestrated by Prem you may find yourself competing with FFH itself if the shares became cheap for any reason in the immediate future.

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Simple math.

ORH has been priced out at $3.8 billion...some were trying to stop the deal beacuse they said it undervalued ORH.

 

FFH market cap is $6 billion...

So Mr.market is telling me that they stole ORH at $3.8b

The remainder of FFH is worth $2.2 billion?

So you are getting all of this for $2.2 billion!

Fairfax holding company (they are now loaded with cash and marketable securities

Northbridge

Crum &Forester

ICICI

runoff (full of investments)

Sounds a bit crazy doesn't it?

 

Prem did not have the dry powder in prior years to be creative..we expect a premium not a discount...

 

Dazel.

 

 

 

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Simple math.

ORH has been priced out at $3.8 billion...some were trying to stop the deal beacuse they said it undervalued ORH.

 

FFH market cap is $6 billion...

So Mr.market is telling me that they stole ORH at $3.8b

The remainder of FFH is worth $2.2 billion?

So you are getting all of this for $2.2 billion!

Fairfax holding company (they are now loaded with cash and marketable securities

Northbridge

Crum &Forester

ICICI

runoff (full of investments)

Sounds a bit crazy doesn't it?

 

Prem did not have the dry powder in prior years to be creative..we expect a premium not a discount...

 

Dazel.

 

 

The market cap is $7 Billion, not $6 Billion.

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Yahoo Finance still shows the mkt cap as $6B but that obviously hasn't been updated with the $1B share issuance of 2.9M shares.  $6B + $1B = $7B.

 

New shares o/s after share issuance related to ORH = 19.687M

Current share price (US$) = $345 (2.9M share issuance was at $347)

Mkt Value = $6.792B

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Yahoo Finance still shows the mkt cap as $6B but that obviously hasn't been updated with the $1B share issuance of 2.9M shares.  $6B + $1B = $7B.

 

New shares o/s after share issuance related to ORH = 19.687M

Current share price (US$) = $345 (2.9M share issuance was at $347)

Mkt Value = $6.792B

 

At June 30, 2009 there were 17,443,784 shares effectively outstanding. An additional 2,881,844 subordinate voting shares were issued in the previously announced offering, totalling 20,325,628 shares (assuming no equity grants/options exercised/share repurchases since June 30.) At $345/share the market capitalization would be US $7,012,341,660.  Yahoo Finance quite frequently has misleading figures.

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Sorry boys I have not not done the sum of the parts for awhile (google finance!) ...If you were to back out Fairfax holding cash you would be in the $6 billion range...We also believe they will be dividending up a lot of cash from the operating companies because they are all over capitalized. They will not ever be in the position they were from 2001-2006.

 

 

We are splitting hairs here now. Everyone has their thesis and that is what is important.

Good luck to all.

 

Dazel.

 

 

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