Fairfax stock positions

[nwoodman]

2 hours ago, Viking said:

The Eurobank management team is best-in-class. One of the things I really like is they underpromise and over-deliver. Below is the slide for 2024. The middle column is what they promised at the start of the year. The column to the right is what they delivered. 

This is really important, and I was thinking exactly that on my dog-walk this morning.  For them to forward forecast 15% returns on Tangible Book, they must be pretty confident in something a little higher.  Also means there was no skeleton’s in Hellenic’s closet.  Well played Eurobank team.

[Hoodlum]

I found it interesting that RBC posted a small writeup on AGT Foods this week.  I wonder if Fairfax is considering an IPO at some point after taking it private 6 years ago.  AGT had $3B in revenue last year.

 

https://thoughtleadership.rbc.com/food-first-how-agriculture-can-lead-a-new-era-for-canadian-exports/

 

How to be a global champion

AGT Food and Ingredients—The value of processing clusters

Pulses and plant-based product supplier exports to more than 100 countries.
Primary markets: Türkiye, Algeria, Iraq and the U.S.
Growth markets: India, South Africa, Saudi Arabia, and United Arab Emirates.

• Export strategy:
  • Its ability to handle and process high volumes of pulses grown in close proximity to processing facilities in western Canada has boosted its export ambitions.
  • AGT has an integrated supply chain from farm gate to global distribution, and has expanded its ownership into export-oriented packaged foods and value-added processing infrastructure and bulk and containerized freight handling and transportation.
  • International business has also been driven by expanding offices and processing capacity in Türkiye, Kazakhstan, United Kingdom, Australia, Europe, U.S., South Africa, and India.
     
• Growth strategy:
  • Acquisitions and new capacity to expand processing within production clusters have enabled AGT to become a global exporter of value-added pulse and durum wheat food products. It has also positioned AGT to go from a buyer and exporter of commodities to retail products with over 21 facilities across Western Canada.
  • AGT is investing and engaged in research and development to create novel products and processing systems.
     

Edited February 28, 2025 by Hoodlum

[Viking]

Eurobank is turning into a very good investment for Fairfax. It has increased in value by about $2.3b over the past 10 years (with all of the return coming in the last 4 years). More importantly, Eurobank is poised to grow TBV at +15% in the coming years. It has a stellar management team.

 

Yes, my total return estimate is calculated at a very high level (like counting the 2025 dividend payment which hasn't happened yet). Given all the moving parts, I am simply trying to find a way to evaluate how the investment has performed. Eurobank is a great example of the pivot of Fairfax's equity holdings from 'old Fairfax' to 'new Fairfax.' Eurobank always had a good management team. They needed (and got) external help:

1. Greece elected a pro business government - to 2 terms.
2. Global central banks ended zero interest rate experiment. 

The result has been magic for Fairfax shareholders over the past 4 years.

 

Eurobank is Fairfax's largest equity holding, with a MV of $3 billion. If it performs strongly that bodes well for the return will generate on its total equity portfolio in the coming years.

 

 

Edited February 28, 2025 by Viking

[dartmonkey]

Quote

 

Yes, my total return estimate is calculated at a very high level (like counting the 2025 dividend payment which hasn't happened yet). Given all the moving parts, I am simply trying to find a way to evaluate how the investment has performed. Eurobank is a great example of the pivot of Fairfax's equity holdings from 'old Fairfax' to 'new Fairfax.' Eurobank always had a good management team. They needed (and got) external help:

1. Greece elected a pro business government - to 2 terms.
2. Global central banks ended zero interest rate experiment. 

The result has been magic for Fairfax shareholders over the past 4 years.

 

Eurobank is Fairfax's largest equity holding, with a MV of $3 billion. If it performs strongly that bodes well for the return will generate on its total equity portfolio in the coming years.

 

 

 

It certainly has been a wonderful investment, after a long slow start, but a 10-y CAGR of about 11% is great when you're investing other people's money (float)!

 

I think the market has been slow to recognize all the good things happening at Eurobank, and I'm amazed the stock is not up more, after the stellar earnings announcement. They are now trading at 6.6x last year's earnings, when we know that the big acquistion of another 37.5% of Hellenic Bank in November, and, soon, the remaining 6.5%, is going to boost 2025 earnings substantially, apart from the underlying growth in Eurobank itself. 

 

My one quibble is that you can't count the $129m future dividend, which is already baked into the present share price. This is not material to your estimate, but I believe the total return should be $2342-$129=$2213. Since the July 2024 dividend and the forced January 2025 share sale are both recent, the timing of these returns is not material but ideally, the total return should be adjusted for the timing of the different components of the return stream, and this will become material as Eurobank continues to issue dividends over the coming years. 

[Viking]

5 hours ago, dartmonkey said:

My one quibble is that you can't count the $129m future dividend, which is already baked into the present share price. This is not material to your estimate, but I believe the total return should be $2342-$129=$2213. Since the July 2024 dividend and the forced January 2025 share sale are both recent, the timing of these returns is not material but ideally, the total return should be adjusted for the timing of the different components of the return stream, and this will become material as Eurobank continues to issue dividends over the coming years. 

@dartmonkey , great point. Thanks for pointing out my mistake. Much appreciated (as that is how I learn). 

[nwoodman]

On 2/28/2025 at 11:50 PM, Hoodlum said:

I found it interesting that RBC posted a small writeup on AGT Foods this week.  I wonder if Fairfax is considering an IPO at some point after taking it private 6 years ago.  AGT had $3B in revenue last year.
 

Thanks @Hoodlum for pointing this out.  It is an intriguing possibility.  

 

In pulling together some notes (attached) on AGT, it was not lost on me that they privatised AGT at pretty much the lows.  It is a much better business today, and I wouldn't be surprised if margins improved due to some of their moves up the value chain.  Apart from the apparent value investing bias to these ag-companies, I wonder if Fairfax finds something thematically appealing.  In the notes, I have tried to touch on this but haven't quite figured out whether there is an angle they see that I am missing.  I guess they are long life and consistent with the 100-year company thesis, bottom rung of Maslow's hierarchy etc

AGT Foods Overview.pdf

[cwericb]

8 hours ago, nwoodman said:

Thanks @Hoodlum for pointing this out.  It is an intriguing possibility.  

 

In pulling together some notes (attached) on AGT, it was not lost on me that they privatised AGT at pretty much the lows.  It is a much better business today, and I wouldn't be surprised if margins improved due to some of their moves up the value chain.  Apart from the apparent value investing bias to these ag-companies, I wonder if Fairfax finds something thematically appealing.  In the notes, I have tried to touch on this but haven't quite figured out whether there is an angle they see that I am missing.  I guess they are long life and consistent with the 100-year company thesis, bottom rung of Maslow's hierarchy etc

AGT Foods Overview.pdf 367.7 kB · 16 downloads

 

That PDF is well worth reading and it gives the reader an appreciation for some of the types of innovative companies that Fairfax has under its wing. Brett Horne should be reading this stuff before he voices his opinions on Fairfax. 

 

AGT's website: https://www.agtfoods.com/

 

AGT's Solieos Fertilizer:

https://soileos.com/

Edited March 2, 2025 by cwericb

[Hoodlum]

8 hours ago, nwoodman said:

Thanks @Hoodlum for pointing this out.  It is an intriguing possibility.  

 

In pulling together some notes (attached) on AGT, it was not lost on me that they privatised AGT at pretty much the lows.  It is a much better business today, and I wouldn't be surprised if margins improved due to some of their moves up the value chain.  Apart from the apparent value investing bias to these ag-companies, I wonder if Fairfax finds something thematically appealing.  In the notes, I have tried to touch on this but haven't quite figured out whether there is an angle they see that I am missing.  I guess they are long life and consistent with the 100-year company thesis, bottom rung of Maslow's hierarchy etc

AGT Foods Overview.pdf 367.7 kB · 22 downloads

thanks @nwoodman for putting that together.  I noticed that FCL paused the Canola crush facility in January due to political uncertainties 

 

https://www.fcl.crs/news-reports/news/article/FCL-pauses-projects-related-to-proposed-Integrated-Agriculture-Complex

 

Also, the rail acquisition by GCM Grosvenor which was expected to close in late q4/q1, seems to be hung up at the government approval stage. The optics would look very bad if the Canadian government would approve this right now.  So it would not surprise me to see this get cancelled or delayed. 
 

[gfp]

8 hours ago, nwoodman said:

Thanks @Hoodlum for pointing this out.  It is an intriguing possibility.  

 

In pulling together some notes (attached) on AGT, it was not lost on me that they privatised AGT at pretty much the lows.  It is a much better business today, and I wouldn't be surprised if margins improved due to some of their moves up the value chain.  Apart from the apparent value investing bias to these ag-companies, I wonder if Fairfax finds something thematically appealing.  In the notes, I have tried to touch on this but haven't quite figured out whether there is an angle they see that I am missing.  I guess they are long life and consistent with the 100-year company thesis, bottom rung of Maslow's hierarchy etc

AGT Foods Overview.pdf 367.7 kB · 19 downloads

 

Thanks for putting this together (and sharing it with us!) - a very comprehensive case study on AGT!

[SafetyinNumbers]

SCR reported earnings and put out their annual reserves letter to shareholders. I estimate FFH owns ~7-7.5% of the company which is a ~$260m position which is a much lower mark than a few years ago when it was private and the CAD was much stronger. 
 

The earnings were in line. They kept 2025 guidance despite the impact of tariffs based on a combination of spreads tightening, hedging and CAD weakness. They highlighted YTD production is at the high end of guidance so it’s possible it will be upgraded mid year. They also increased their regular dividend from $0.25/q to 0.26/q explaining its linked to production increase and/or decrease in costs. Recall during the investor day, they suggested the regular dividend could be $3 in 2030 and now we know how they will get there.
 

Regular dividend increases should make SCR attractive to dividend ETFs and benchmarks over time. First it has to get into the S&P/TSX Composite though which is just a matter of time.

 

I think the shareholder letter is a terrific read so I have attached it. Over time, I think their execution and communication will result in a very loyal shareholder base that will hold it even when the stock trades above NAV as opposed to well below it as it does now. That’s my plan at least. 

Strathcona-2024-Reserves-Letter-Final.pdf

[nwoodman]

3 hours ago, SafetyinNumbers said:

SCR reported earnings and put out their annual reserves letter to shareholders. I estimate FFH owns ~7-7.5% of the company which is a ~$260m position which is a much lower mark than a few years ago when it was private and the CAD was much stronger. 
 

The earnings were in line. They kept 2025 guidance despite the impact of tariffs based on a combination of spreads tightening, hedging and CAD weakness. They highlighted YTD production is at the high end of guidance so it’s possible it will be upgraded mid year. They also increased their regular dividend from $0.25/q to 0.26/q explaining its linked to production increase and/or decrease in costs. Recall during the investor day, they suggested the regular dividend could be $3 in 2030 and now we know how they will get there.
 

Regular dividend increases should make SCR attractive to dividend ETFs and benchmarks over time. First it has to get into the S&P/TSX Composite though which is just a matter of time.

 

I think the shareholder letter is a terrific read so I have attached it. Over time, I think their execution and communication will result in a very loyal shareholder base that will hold it even when the stock trades above NAV as opposed to well below it as it does now. That’s my plan at least. 

Strathcona-2024-Reserves-Letter-Final.pdf 398.99 kB · 11 downloads

Thanks for this.  These guys seem right up my alley, might have to do some work.  Seems pretty cheap on a NAV basis at first pass.  A couple of paras jumped out at me:

 

“In a capital-intensive industry like oil and gas where capital is typically the largest expense, excluding DD&A in analyzing a company's profitability is akin to excluding the cost of the players on an NHL team. As aresult, popular Wall Street metrics which exclude DD&A such as "DACF" or "EBITDA" are four letter words in Strathcona's offices. Instead, we focus on post-DD&A metrics such as Operating Earnings, which reflect the profitability of the business after accounting for the very real capital costs required to maintain current earning power.”

 

“In a capital-intensive business such as oil and gas, the value of existing production can quickly evaporate due to poor go-forward drilling returns, just like large production bases can quickly form from small ones if capital is profitably deployed. In the case of Strathcona, our future investment opportunity ($31.2 billion of future development capital on a 2P reserves basis) dramatically outweighs our current PDP PV-10 ($6.1 billion). To invest based on the latter instead of the former is a little like choosing a spouse based on who will be most fun on the honeymoon instead of the marriage... what starts with bliss can end in misery.”

 

Edit: This is the very sort of long life asset that Fairfax should be investing in.  Would happily see them own 20-30%. 

 

 

 

 

Edited March 5, 2025 by nwoodman

[nwoodman]

On 3/3/2025 at 2:16 AM, Hoodlum said:

thanks @nwoodman for putting that together.  I noticed that FCL paused the Canola crush facility in January due to political uncertainties 

 

https://www.fcl.crs/news-reports/news/article/FCL-pauses-projects-related-to-proposed-Integrated-Agriculture-Complex

 

Also, the rail acquisition by GCM Grosvenor which was expected to close in late q4/q1, seems to be hung up at the government approval stage. The optics would look very bad if the Canadian government would approve this right now.  So it would not surprise me to see this get cancelled or delayed. 
 

Thanks . Both interesting developments.

[Hoodlum]

Quess Corp received approval for their demerger today.  The 3 separate entities are expected to be listed within 2 months.  
 

https://m.economictimes.com/tech/technology/with-nclt-nod-in-place-business-services-provider-quess-to-list-new-firms-on-exchanges-in-two-months/amp_articleshow/118766297.cms

 

[Viking]

35 minutes ago, Hoodlum said:

Quess Corp received approval for their demerger today.  The 3 separate entities are expected to be listed within 2 months.  
 

https://m.economictimes.com/tech/technology/with-nclt-nod-in-place-business-services-provider-quess-to-list-new-firms-on-exchanges-in-two-months/amp_articleshow/118766297.cms

 

This was an very good move for IIFL when they split into 4 companies:

- Finance

- Wealth

- Securities

- 5paisa

 

Each company has prospered. The separation allowed each of the companies to get much more focussed/entrepreneurial. The value creation in the subsequent years for Fairfax and Fairfax India was material. 
 

Quess is a massive company. It houses many large, unrelated businesses. I love this move and my guess is it will be a very good move from both a business and financial (return) perspective for Quess shareholders. Quess’ stock is already up big time over the past year as investors anticipate/get positioned for what is to come (over the next 2 or 3 years).

 

These are two great examples of the benefits of partnering with Fairfax:

- patient partner

- loyal partner (there in tough times)

 

Great strategic advisor:

- step 1 - grow through acquisition

- step 2 - incubate

- step 3 - spin off 

 

The goal is to build value over the long term for shareholders. Not simply grow for growths sake - and become a lumbering, poorly performing conglomerate. We are getting closer to the ‘get paid’ stage - that should happen in the coming years (like we saw with IIFL as Fairfax and Fairfax India opportunistically exited big chunks of their IIFL positions).

Edited March 6, 2025 by Viking

[Santayana]

I visited my daughter at her new apartment in Seattle this week.  When I got to the main entrance, I saw a little Kennedy Wilson plaque!  it was a great building in a great location, right in the heart of the Amazon campus.  Seems like real estate to be happy owning.

[nwoodman]

On 3/5/2025 at 7:57 PM, nwoodman said:

Thanks for this.  These guys seem right up my alley, might have to do some work.  Seems pretty cheap on a NAV basis at first pass.  A couple of paras jumped out at me:

 

“In a capital-intensive industry like oil and gas where capital is typically the largest expense, excluding DD&A in analyzing a company's profitability is akin to excluding the cost of the players on an NHL team. As aresult, popular Wall Street metrics which exclude DD&A such as "DACF" or "EBITDA" are four letter words in Strathcona's offices. Instead, we focus on post-DD&A metrics such as Operating Earnings, which reflect the profitability of the business after accounting for the very real capital costs required to maintain current earning power.”

 

“In a capital-intensive business such as oil and gas, the value of existing production can quickly evaporate due to poor go-forward drilling returns, just like large production bases can quickly form from small ones if capital is profitably deployed. In the case of Strathcona, our future investment opportunity ($31.2 billion of future development capital on a 2P reserves basis) dramatically outweighs our current PDP PV-10 ($6.1 billion). To invest based on the latter instead of the former is a little like choosing a spouse based on who will be most fun on the honeymoon instead of the marriage... what starts with bliss can end in misery.”

 

Edit: This is the very sort of long life asset that Fairfax should be investing in.  Would happily see them own 20-30%. 

 

 

 

 

I finally got around to pulling together some notes for Strathcona (attached). Thanks, @SafetyinNumbers. This was another constant reminder of what Fairfax has been up to over the last seven years. I am truly impressed with what Adam Waterous has pulled together—a textbook roll-up. No wonder Prem was so full of praise in the Annual Report.

 

"We met Adam Waterous and the team at Waterous Energy Fund (“WEF”) in 2018. After a storied 27-year career in

energy in Calgary, Adam was raising money for a fund to invest in and consolidate sub-scale, long life oil and gas

businesses and assets in Canada. We were impressed by Adam’s focus on long term returns on capital. The WEF

team had extensive experience in investing in oil and gas and Adam had built Waterous & Co, starting in 1991, into

the largest oil and gas M&A firm in the world before selling it to Scotiabank in 2005. We invested $129 million

which is currently valued at approximately $290 million through a stake in publicly traded Strathcona Resources.

WEF built this company from scratch over 7 years into Canada’s 5th largest oil company producing close to 200,000

barrels per day of long life, low cost, very profitable oil. We then committed another $750 million to WEF’s next

fund. The WEF team has already deployed a total from the fund of $323 million for a controlling stake in Greenfire

Resources, a publicly traded oil company located in the Athabasca region of Canada. WEF’s latest investment is

another business with long life (even longer than Strathcona!), low decline assets producing approximately 20,000

barrels per day that is Canada’s 11th largest oil company by proved plus probable reserves. In every respect, Adam

has proven an outstanding Fairfax partner."

 

Between Strathcona and WEF III, they probably have $1.5-2bn of IV in the making. I didn't have time to dive into Greenfire Resources, but given the pedigree of previous investments, you know it is going to make sense. I have no crystal ball on oil prices, but I think it is a good use of insurance float and consistent with the "100-year company" aspiration.

 

Strathcona Resources Overview.pdf

Edited March 11, 2025 by nwoodman

[ValueNation]

Amazing, @nwoodman, thanks for this comprehensive analysis. 

 

I noted this quote from your write-up:

 

Also, virtually all Strathcona’s exports go to the U.S., so any trade spat or border tax on carbon (a hypothetical future U.S. carbon tariff) could impact it. But North American energy integration is deep, so this is a low risk. By contrast, peers who export globally (like those in OPEC) have to consider trade/shipping risks (Strathcona does not).

 

Do you still consider this to be a low risk in the current political climate? I take the point that in the long term view this risk should fade, but in the short and even medium term, I wonder if the market will ascribe more risk than you might suggest.

 

Thanks again for this.

[SafetyinNumbers]

1 hour ago, ValueNation said:

Amazing, @nwoodman, thanks for this comprehensive analysis. 

 

I noted this quote from your write-up:

 

Also, virtually all Strathcona’s exports go to the U.S., so any trade spat or border tax on carbon (a hypothetical future U.S. carbon tariff) could impact it. But North American energy integration is deep, so this is a low risk. By contrast, peers who export globally (like those in OPEC) have to consider trade/shipping risks (Strathcona does not).

 

Do you still consider this to be a low risk in the current political climate? I take the point that in the long term view this risk should fade, but in the short and even medium term, I wonder if the market will ascribe more risk than you might suggest.

 

Thanks again for this.

FWIW, the company had the below to say on tariffs when they released Q4 results last week.

 

 

 

[dartmonkey]

This sounds reassuring for 2025 because they are hedged but maybe not for subsequent years.

 

[buylowersellhigh]

12 hours ago, nwoodman said:

I finally got around to pulling together some notes for Strathcona (attached). Thanks, @SafetyinNumbers. This was another constant reminder of what Fairfax has been up to over the last seven years. I am truly impressed with what Adam Waterous has pulled together—a textbook roll-up. No wonder Prem was so full of praise in the Annual Report.

 

"We met Adam Waterous and the team at Waterous Energy Fund (“WEF”) in 2018. After a storied 27-year career in

energy in Calgary, Adam was raising money for a fund to invest in and consolidate sub-scale, long life oil and gas

businesses and assets in Canada. We were impressed by Adam’s focus on long term returns on capital. The WEF

team had extensive experience in investing in oil and gas and Adam had built Waterous & Co, starting in 1991, into

the largest oil and gas M&A firm in the world before selling it to Scotiabank in 2005. We invested $129 million

which is currently valued at approximately $290 million through a stake in publicly traded Strathcona Resources.

WEF built this company from scratch over 7 years into Canada’s 5th largest oil company producing close to 200,000

barrels per day of long life, low cost, very profitable oil. We then committed another $750 million to WEF’s next

fund. The WEF team has already deployed a total from the fund of $323 million for a controlling stake in Greenfire

Resources, a publicly traded oil company located in the Athabasca region of Canada. WEF’s latest investment is

another business with long life (even longer than Strathcona!), low decline assets producing approximately 20,000

barrels per day that is Canada’s 11th largest oil company by proved plus probable reserves. In every respect, Adam

has proven an outstanding Fairfax partner."

 

Between Strathcona and WEF III, they probably have $1.5-2bn of IV in the making. I didn't have time to dive into Greenfire Resources, but given the pedigree of previous investments, you know it is going to make sense. I have no crystal ball on oil prices, but I think it is a good use of insurance float and consistent with the "100-year company" aspiration.

 

Strathcona Resources Overview.pdf 3.82 MB · 35 downloads

You should post this in the strathcona board 

[nwoodman]

6 hours ago, ValueNation said:

Amazing, @nwoodman, thanks for this comprehensive analysis. 

 

I noted this quote from your write-up:

 

Also, virtually all Strathcona’s exports go to the U.S., so any trade spat or border tax on carbon (a hypothetical future U.S. carbon tariff) could impact it. But North American energy integration is deep, so this is a low risk. By contrast, peers who export globally (like those in OPEC) have to consider trade/shipping risks (Strathcona does not).

 

Do you still consider this to be a low risk in the current political climate? I take the point that in the long term view this risk should fade, but in the short and even medium term, I wonder if the market will ascribe more risk than you might suggest.

 

Thanks again for this.

I think like a lot of us, the on-again off-again tariff spat makes it difficult to call.  Without getting into the politics, I think energy/oil is almost too important to receive the full brunt if Tariffs really do go ahead. 
 

https://www.canadianenergycentre.ca/explainer-why-canadian-oil-is-so-important-to-the-united-states/#:~:text=“Light” and “heavy”,qualities in between the two

 

When I started assembling the notes SCR was trading in the low 20’s, at that price the risk seemed priced in.  The share price has since bounced so a slightly lower margin of safety now.  
 

A higher risk in the short to medium term is oil in the 40’s.  Longer term that will be a great setup.  For a long term holder of assets that sort of volatility is an opportunity for Fairfax not a threat.  I think we can all see what they (Fairfax) are assembling and that is a basket of these types of assets.  As long as you don’t overpay you do OK over the full cycle. OK => Good, with float leverage.

 

 

[nwoodman]

MS with the note and a decent upgraded PT of €3.18 for Eurobank.  That sounds more like it Nida.  

 

Summary

 

1. Investment Outlook: Still More to Go

• Greek banks remain rate-sensitive but benefit from solid loan growth (+7.5-8%), underpenetrated fee income, and normalized cost of risk (COR).

• Valuations are still cheap at 6.5x FY26e P/E, with a 25% upside on average.

• Morgan Stanley raises its 2027 rate assumption to 1.5% from 1.0% and lowers the cost of equity (COE) by 100bps, improving the growth outlook.

 

2. Earnings and Dividend Projections

• Net interest margin (NIM) compression due to rate cuts is expected to be fully offset by loan and fee growth.

• 50% dividend payouts expected between 2025-2027, returning ~25% of the market cap in dividends.

• Greek banks are trading at a discount to European peers, but this gap is expected to narrow due to strong GDP growth (2.2% in 2025 vs 0.8% EU avg).

 

3. Stock Ratings and Price Targets

• Piraeus Bank (BOPr.AT) upgraded to Overweight, Eurobank (EURBr.AT) downgraded to Equal-weight, while Alpha Bank and National Bank of Greece (NBG) remain Overweight.

• New price targets:

• Piraeus: €6.14 (previously €4.94)

• Alpha Bank: €2.64 (previously €2.11)

• Eurobank: €3.18 (previously €2.77)

• NBG: €10.66 (previously €9.05)

 

4. Comparative Valuations

• Greek banks trade at 0.8x FY26e P/B vs EU banks at 1.1x.

• Greek banks’ Return on Tangible Equity (ROTE) is 13%, in line with EU peers in 2025 but slightly lower in 2026 due to lower leverage.

 

5. Individual Bank Highlights

• Alpha Bank (Overweight): Strong balance sheet, lower NPEs, resilient to rate cuts, 6% loan growth CAGR expected.

• Eurobank (Equal-weight): Best-in-class returns but risk/reward better at Piraeus and Alpha.

• Piraeus Bank (Overweight): Cheapest valuation, NPE ratio below 3%, significant capital return.

• NBG (Equal-weight): Capital return story, slower earnings momentum expected.

 

6. Risks

• Macro environment remains fragile, potential shocks could impact recovery.

• Absorption of EU recovery funds could be slower than expected.

• Higher-than-expected cost of funding could affect profitability.

 

Love their work, sounds like our friends at Morgan Stanley might be leaning in a little more to the great European rotation where you bravely depart P/E 25’s and modest growth and  invest at P/E 7 for a 15% grower.  Brave stuff indeed.

 

 

EEMEA_20250307_0401.pdf

Edited March 12, 2025 by nwoodman

[Viking]

With the correction in stocks, how is Fairfax’s largest equity holding performing? YTD, Eurobank is up $467m. Fairfax also received $194m in Jan (sold 80m shares as required by Grk regulators). Total = $661m.

 

Excess of FV over CV = $1.15b ($53 er Fairfax share).

 

[Viking]

With the correction in stocks, how is Fairfax’s largest mark-to-market equity holding performing? YTD 2025 Orla Mining (gold producer) is up $176m. Over the past 14.5 months the holding is up $306m or 166%. This does not include the convertible notes. Outstanding.

 

Edited March 14, 2025 by Viking

[gfp]

Market crash!