Fairfax stock positions

[nwoodman]

MS coverage of Eurobanks Q1 25 results (attached)
 

“Eurobank reported Q1 2025 EPS of €0.09, putting it on pace for €0.36+ annualised—just 6.7x earnings at the current share price of €2.41. RoTBV came in at a strong 16.2%, with CET1 at 15.5% and a low NPE ratio of 2.9% covered 89% by provisions. Tangible book value rose to €2.39 per share, meaning the stock trades almost exactly at book despite sector-leading returns, strong capital, and over half of profits now coming from international markets.”

 

https://www.eurobankholdings.gr/en/investor-relations/financial-results-pages/first-quarter-2025

 

For a bank growing organically and compounding earnings, this remains cheap!

EUROBANK_20250508_1614.pdf

Edited May 9, 2025 by nwoodman

[SafetyinNumbers]

1 hour ago, nwoodman said:

MS coverage of Eurobanks Q1 25 results (attached)
 

“Eurobank reported Q1 2025 EPS of €0.09, putting it on pace for €0.36+ annualised—just 6.7x earnings at the current share price of €2.41. RoTBV came in at a strong 16.2%, with CET1 at 15.5% and a low NPE ratio of 2.9% covered 89% by provisions. Tangible book value rose to €2.39 per share, meaning the stock trades almost exactly at book despite sector-leading returns, strong capital, and over half of profits now coming from international markets.”

 

https://www.eurobankholdings.gr/en/investor-relations/financial-results-pages/first-quarter-2025

 

For a bank growing organically and compounding earnings, this remains cheap!

EUROBANK_20250508_1614.pdf 267.84 kB · 3 downloads

Fairfax and everyone else gets their dividend cheque tomorrow. The buyback also starts tomorrow. It’s for ~3% of the market cap from what I can tell. It will be interesting to see if it makes an impact. 

[mananainvesting]

On 5/6/2025 at 10:28 AM, KFRCanuk said:

I'm wondering which one of their subs/investments is next now that they are taking over The Keg.

My guess is $DXT.TO. The company is doing buybacks, so Fairfax stake is increasing organically. Only a matter of time before it is taken private imo. Fairfax owns ~51% of Dexterra shares already. 

[nwoodman]

2 hours ago, SafetyinNumbers said:

Fairfax and everyone else gets their dividend cheque tomorrow. The buyback also starts tomorrow. It’s for ~3% of the market cap from what I can tell. It will be interesting to see if it makes an impact. 

Definitely, at current prices it would put Fairfax just over the 33.3% limit.  So I think they are expecting some appreciation

 

 

Buyback Impact on Fairfax’s Ownership

 

Buyback authorization: €287.94m

Share price: €2.41

Shares to be repurchased:
€287.94m ÷ €2.41 ≈ 119.46m shares

Shares outstanding (from TBV):
€8.764b ÷ €2.39 ≈ 3.668b shares

Buyback % of float:
119.46m ÷ 3.668b ≈ 3.26%

Fairfax’s current stake:
32.3% × 3.668b ≈ 1.184b shares

Post-buyback total shares:
3.668b − 119.46m ≈ 3.5485b

New ownership %:
1.184b ÷ 3.5485b ≈ 33.36%

 

 At €2.41 per share, Eurobank is quietly delivering a near 7% capital return yield—split between a well-covered €0.09 dividend (3.7%) and a newly approved €288m buyback (3.3%). Pretty tasty

 

 

[SafetyinNumbers]

6 hours ago, nwoodman said:

Definitely, at current prices it would put Fairfax just over the 33.3% limit.  So I think they are expecting some appreciation

 

 

Buyback Impact on Fairfax’s Ownership

 

Buyback authorization: €287.94m

Share price: €2.41

Shares to be repurchased:
€287.94m ÷ €2.41 ≈ 119.46m shares

Shares outstanding (from TBV):
€8.764b ÷ €2.39 ≈ 3.668b shares

Buyback % of float:
119.46m ÷ 3.668b ≈ 3.26%

Fairfax’s current stake:
32.3% × 3.668b ≈ 1.184b shares

Post-buyback total shares:
3.668b − 119.46m ≈ 3.5485b

New ownership %:
1.184b ÷ 3.5485b ≈ 33.36%

 

 At €2.41 per share, Eurobank is quietly delivering a near 7% capital return yield—split between a well-covered €0.09 dividend (3.7%) and a newly approved €288m buyback (3.3%). Pretty tasty

 

 

This week’s dividend was up to €0.105 from €0.09 last year so a little tastier! I wonder if FFH will sell every time Eurobank buys or if they do a block when they have to.

[nwoodman]

14 minutes ago, SafetyinNumbers said:

This week’s dividend was up to €0.105 from €0.09 last year so a little tastier! I wonder if FFH will sell every time Eurobank buys or if they do a block when they have to.

Good one.  This is a 60c on the euro opportunity so buybacks add a lot of value.  Lazy thinking suggests it makes sense for Fairfax to pay the capital gains tax and allow Eurobank to buyback more after this block.  The good news is there will be no lazy thinking.  What a remarkable situation, it does seem like this is shaping up as a go forward 15% CAGR embedded in a float leveraged entity striving for 15%. Where it becomes a bit heady is that Eutobank seems to be one of many.

Edited May 9, 2025 by nwoodman

[KFRCanuk]

https://www.marketbeat.com/instant-alerts/fairfax-financial-holdings-ltd-can-makes-new-12174-million-investment-in-cvs-health-co-nysecvs-2025-05-09/

 

Quote

Fairfax Financial Holdings Ltd. Can purchased a new position in shares of CVS Health Co. (NYSE:CVS - Free Report) in the fourth quarter, according to its most recent filing with the Securities and Exchange Commission. The institutional investor purchased 2,712,000 shares of the pharmacy operator's stock, valued at approximately $121,742,000

 

Purchase price looks to be $44.89/share. Current price is $61.57 and a 52 week range of $43.56 - $72.51

I hope my numbers are right!

[gfp]

10 minutes ago, KFRCanuk said:

https://www.marketbeat.com/instant-alerts/fairfax-financial-holdings-ltd-can-makes-new-12174-million-investment-in-cvs-health-co-nysecvs-2025-05-09/

 

 

Purchase price looks to be $44.89/share. Current price is $61.57 and a 52 week range of $43.56 - $72.51

I hope my numbers are right!

 

This was reported for the 4th quarter of last year.  $44.89 isn't the purchase price, it is the closing price for the year.  I feel like we have had this conversation before.  Deja vu?

 

Fairfax's cost basis for CVS is around $53.72 per share fwiw

Edited May 13, 2025 by gfp

[SafetyinNumbers]

1 hour ago, gfp said:

 

This was reported for the 4th quarter of last year.  $44.89 isn't the purchase price, it is the closing price for the year.  I feel like we have had this conversation before.  Deja vu?

 

Fairfax's cost basis for CVS is around $53.72 per share fwiw

New 13F should be out this week (May 15 is final day to file).

[Viking]

On 5/9/2025 at 5:57 AM, nwoodman said:

What a remarkable situation, it does seem like this is shaping up as a go forward 15% CAGR embedded in a float leveraged entity striving for 15%. Where it becomes a bit heady is that Eurobank seems to be one of many.

@nwoodman, great concise summary of the current set-up with Fairfax today. Of course, those who do not follow the company closely do not appreciate how much leverage (how many large coiled springs) Fairfax has ‘hidden’ under the hood. Of course investments like Eurobank, Poseidon, BIAL and Ki are not ‘hidden’ - but their likely impact on Fairfax’s future results are not well understood or priced into the stock today. This provides a large margin of safety, even at Fairfax’s current price. This probably explains why Fairfax remained aggressive with share buybacks in Q1 - they KNOW what Fairfax is worth. 
 

PS: For those people who anchor heavily to book value, Eurobank, Poseidon, BIAL and Ki are 4 examples of where Fairfax’s book value is understated. There are more (Sigma is a good example from Q1). 
 

The turnaround of the equity portfolio that started in 2018 is really starting to produce results. We are just starting to grasp the importance/impact of this development. 
 

Andy Barnard taking the reins of the insurance business in 2011 was a seminal moment for that business. It is only in the last couple of years that investors are beginning to grasping the quality of the insurance business. It was a long journey. It takes time for investors to connect the dots and update their views/narrative.

 

My view is something similar happened at Hamblin Watsa around 2018. The investment management framework was adjusted/improved. 7 years later the benefits of the changes are now flowing through to reported results. But much of the benefits (economic value that has been created) have happened under the hood - and have not yet been captured in accounting results (EPS and book value). 
 

‘Time is the friend of the wonderful business.’ Insurance and investment management business engines are both wonderful businesses at Fairfax. They are now compounding at a high rate of return (some of that compounding is not being captured in reported results). Time has become Fairfax’s friend. And the friend of its shareholders.

Edited May 13, 2025 by Viking

[lessthaniv]

On 5/2/2025 at 1:44 PM, Viking said:

From my perspective, the best time to buy Fairfax was likely Oct 2022 when the shares traded down to US$450. At this time, investors had very good visibility/evidence that the turnaround at Fairfax was happening. 

1. They had just announced the sale of pet insurance - it was like they found $1 billion in gold (after tax) in their backyard. The stock actually sold off after this was announced. 
2. They were fixing their equity holdings. They announced the sale of Recipe at the top of the lumber cycle for another big gain (it also improved the company by getting rid of a chronic under-performer). At the same time, share of profit from associates was popping higher (driven by Eurobank and Atlas).
3. And the outlook for interest income was rapidly improving. In Q3 interest rates popped to over 4% across the curve. We knew Fairfax had a very low average duration with their fixed income portfolio - so the earn though from higher rates would likely be fast.

x2  That's exactly what I did. I sold a ton of things in favour of FFH in Oct/2022.  Never looked back. 

[villainx]

3 hours ago, Viking said:

great short summary

muddy waters back at it?

 

[Viking]

42 minutes ago, villainx said:

muddy waters back at it?

Ouch! I had to edit my post…  

[Hektor]

12 hours ago, Viking said:

Ouch! I had to edit my post…  

[Hoodlum]

Fairfax picked up another 25M shares of Foran Mining at $3/share. 
 

https://www.newswire.ca/news-releases/foran-announces-pricing-of-350m-non-brokered-private-placement-840129262.html

[SafetyinNumbers]

42 minutes ago, Hoodlum said:

Fairfax picked up another 25M shares of Foran Mining at $3/share. 
 

https://www.newswire.ca/news-releases/foran-announces-pricing-of-350m-non-brokered-private-placement-840129262.html

Looks like Aginco significantly increased its % ownership and Fairfax slightly decreased its % ownership.

[gfp]

Fairfax doubled down on CLF in q1.  Luckily still not that big of a position.  (the initial position was received as consideration from Stelco merger)

 

https://www.dataroma.com/m/holdings.php?m=FFH

[dartmonkey]

14 hours ago, SafetyinNumbers said:

Looks like Aginco significantly increased its % ownership and Fairfax slightly decreased its % ownership.

Fairfax is subscribing for $28m of the total $350m, i.e. 8% of the new shares. They had a 23% ownership position at the end of 2024, so yes, their stake will now increase but their % ownership will decrease. 

[dartmonkey]

1 hour ago, gfp said:

Fairfax doubled down on CLF in q1.  Luckily still not that big of a position.  (the initial position was received as consideration from Stelco merger)

 

https://www.dataroma.com/m/holdings.php?m=FFH

Cliffs was worth about $7.2b when they bought Stelco for $2.5b, with very bad timing, as about a third of Cliff's assets are now on the wrong side of the border wrt tariffs. Going from 6m shares of Cliffs (after selling the Stelco business to Cliffs for about 90% cash and 10% shares) to 15m shares now is a small bet, $122m compared to the $2.5b they got for selling Stelco, but the timing is nice. And maybe it also means that Fairfax doesn't just stand for fair and friendly acquisitions, but also fair and friendly divestitures ?

[SafetyinNumbers]

2 hours ago, dartmonkey said:

Fairfax is subscribing for $28m of the total $350m, i.e. 8% of the new shares. They had a 23% ownership position at the end of 2024, so yes, their stake will now increase but their % ownership will decrease. 

I think you misread that. They bought $75m or ~21% of the issue.

 

[TwoCitiesCapital]

2 hours ago, dartmonkey said:

Cliffs was worth about $7.2b when they bought Stelco for $2.5b, with very bad timing, as about a third of Cliff's assets are now on the wrong side of the border wrt tariffs. Going from 6m shares of Cliffs (after selling the Stelco business to Cliffs for about 90% cash and 10% shares) to 15m shares now is a small bet, $122m compared to the $2.5b they got for selling Stelco, but the timing is nice. And maybe it also means that Fairfax doesn't just stand for fair and friendly acquisitions, but also fair and friendly divestitures ?

 

Agreed it's small for them. Still not yet bigger than BB with BBs 80-90% losses. 

 

But, is a good sign and may hold for further accumulation. They know the assets/industry it seems and may know LG at this point. 

 

I rolled all of my stock position to dec 2026 LEAPS to increase notional, take cash off the table, and give myself a timeline for being right or wrong on this one. 

[dartmonkey]

1 hour ago, SafetyinNumbers said:

think you misread that. They bought $75m or ~21% of the issue.

Oh, right you are. $75m from Fairfax, not $28m, which is from a different investor.

 

But your conclusion is still right: they previously owned 23% of the company, so they will be (slightly) reducing their ownership percentage.

[ValueNation]

https://news.fairfax.ca/emails/webview/238951/154511783811351570
 

Any thoughts on whether they are buying out minority interests in subs or looking at other opportunities?

[Hoodlum]

25 minutes ago, ValueNation said:

https://news.fairfax.ca/emails/webview/238951/154511783811351570
 

Any thoughts on whether they are buying out minority interests in subs or looking at other opportunities?

The first priority is the $500M in preferred shares coming due later this year.  That will require all of the 2035 notes.  The below was from the Q1 conference call. 

 

“We have about 500 million of preferred shares that are coming up at the end of the year… we’re going to look at that.”

 

 

Edited May 16, 2025 by Hoodlum

[Hoodlum]

The call options on the minority interests in Allied and Odyssey expire in 2026 and 2029, respectively.  So there is no rush for Odyssey ($1B) and they could wait until next year (September) for Allied World (~$800M?).  
 

I think the other $400M in 2055 Notes would be used to close out additional TRS swaps by buying back those shares.