Fairfax stock positions

[Buckeye]

Replace "Participate in" with "Sell into"? 

[Hoodlum]

Just now, Buckeye said:

Replace "Participate in" with "Sell into"? 

Maybe the market got confused and thought that Fairfax would also be buyers.  

[Crip1]

3 minutes ago, dartmonkey said:

 

What does this even mean? If Eurobank repurchases its own shares, that would mean that all investors' percentage holdings of the company would increase, as long as the don't sell their shares. Fairfax has recently had to sell shares on the market to remain below their allowed 33.3% stake. So it would make no sense for Fairfax to also repurchase shares, alongside Eurobank. If anything, it might mean that Fairfax would be tendering its shares to Eurobank, so as not to break through the 33.3% cap. (Edit: While I was typing this, villainx and gfp said essentially the same thing...)

Only speculating here, but thinking that for every two shares Eurobank buys on the open market, FFH is selling one to Eurobank in order to maintain the 33.3% max. Presuming that the FFH-Eurobank transaction is for either a set dollar amount or, more likely, for the average cost/share that Eurobank is buying on the open market.

 

Interested if anyone has more knowledge of this.

 

-Crip

[gfp]

Yeah it's no big mystery.  Totally rational to "participate" by selling pro-rata directly to the company.  Easier for everybody.  Fair and friendly.

 

We may wish they weren't required to sell but we don't make the rules.  There are worse problems to have

[nwoodman]

18 minutes ago, gfp said:

 

As I understand it, what is new is the announcement that Fairfax will participate in the company's repurchase activity by selling pro-rata directly to the company so it doesn't continually bump into the 33% threshold, sell in the open market, repeat

+1, sums it up nicely. Specifically Law 4261/2014.  As previously discussed they had a carve out, unfortunately no longer. Regs attached 

LAW_4261_OF_2014.pdf

[dartmonkey]

25 minutes ago, gfp said:

We may wish they weren't required to sell but we don't make the rules.  There are worse problems to have

 Sure are. According to the 2019 annual report, Fairfax bought 40% of the company in 2016 at €0.94/share. Today's interim price of €2.85/share is a nice 200% return in 9 years, but most of that has been in the last 3 years, as the price was still onlyin the low €0.30s in May 2020 (not quite as bad with dividends included), and after they were still under €0.90 as recently as October 2022.

[Crip1]

4 minutes ago, dartmonkey said:

 Sure are. According to the 2019 annual report, Fairfax bought 40% of the company in 2016 at €0.94/share. Today's interim price of €2.85/share is a nice 200% return in 9 years, but most of that has been in the last 3 years, as the price was still onlyin the low €0.30s in May 2020 (not quite as bad with dividends included), and after they were still under €0.90 as recently as October 2022.

And there were a few folks on this message board who pounded the table in fall of 2022 that it was a bargain, even after tripling in the previous 2-3 years. My thought at the time was "I own enough of this through Fairfax so I'll pass". Those folks were right, clearly, and just as clearly I forgot the Mae West quote that Buffett will refer to: "Too much of a good thing can be wonderful". 

 

-Crip

[Buckeye]

1 hour ago, gfp said:

Yeah it's no big mystery.  Totally rational to "participate" by selling pro-rata directly to the company.  Easier for everybody.  Fair and friendly.

 

We may wish they weren't required to sell but we don't make the rules.  There are worse problems to have

 

[nwoodman]

6 hours ago, dartmonkey said:

 Sure are. According to the 2019 annual report, Fairfax bought 40% of the company in 2016 at €0.94/share. Today's interim price of €2.85/share is a nice 200% return in 9 years, but most of that has been in the last 3 years, as the price was still onlyin the low €0.30s in May 2020 (not quite as bad with dividends included), and after they were still under €0.90 as recently as October 2022.

I bet they have petitioned not to sell but that’s life. The upside is that every share they sell into the buyback they still get an 11% uplift give or take in terms of EPS.  They raise ~350m after tax.  Going out on a limb here, they might find another opportunity for the realised even after tax

Edited May 28, 2025 by nwoodman

[MMM20]

58 minutes ago, Crip1 said:

And there were a few folks on this message board who pounded the table in fall of 2022 that it was a bargain, even after tripling in the previous 2-3 years. My thought at the time was "I own enough of this through Fairfax so I'll pass". Those folks were right, clearly, and just as clearly I forgot the Mae West quote that Buffett will refer to: "Too much of a good thing can be wonderful". 

 

Like Quincy Lee (Ancient Art/ Teton Capital) https://www.valueinvestorsclub.com/idea/Eurobank/7301771925 "In the two years since my last Eurobank writeup, the stock has doubled while the Nasdaq is down 8%.  The same thing will probably happen again the next two years to be quite honest.  Probably none of you bought it, and probably won’t this time either.  Anyway, I still like it today and haven’t sold a single share."

[villainx]

23 minutes ago, MMM20 said:

Probably none of you bought it, and probably won’t this time either.

 

Come on, there's nicer way of saying this, or don't even say it!

[Hoodlum]

I came across this article on investments in Cyprus from India.  It mentioned the recent investments of Eurobank, Thomas Cook India and LTIMindtree.  It sounds like additional Indian companies are looking at setting up in Cyprus which should bode well for future growth at Eurobank. 

 

https://knews.kathimerini.com.cy/en/business/india-turns-its-gaze-to-cyprus-as-gateway-to-europe-and-the-middle-east

 

Two Indian corporate heavyweights, Thomas Cook India and LTIMindtree, have already set up shop on the island, marking the first wave of what looks to be a wider movement. Their presence is laying the groundwork for closer economic cooperation, with Cyprus positioned as a launchpad for Indian companies looking westward.

 

 

According to exclusive information shared with Kathimerini, more than 20 large Indian companies are currently exploring the possibility of setting up operations in Cyprus. Discussions with local authorities are already at an advanced stage, suggesting a significant influx of Indian investment could be on the horizon.

[glider3834]

On 7/16/2024 at 6:56 AM, gfp said:

 

Fairfax owns 49.99% of Cairo Mezz PLC, mostly in Eurolife FFH Life Insurance (46.9%).

 

So... Around EUR 63.6 million at market price - just under $70m USD ?

(edit: I agree this is obviously not marked to market on Fairfax's books)

Cairo Mezz have updated their fair value  on these notes to EUR 240M - carrying amounts versus nominal amounts shown below 

 

 

 

[gfp]

6 minutes ago, glider3834 said:

Cairo Mezz have updated their fair value  on these notes to EUR 240M - carrying amounts versus nominal amounts shown below 

 

 

 

 

I have only a foggy memory of the prior discussion.  Does that mean the value for Fairfax went up from something like $70m USD to $136m USD?  

[glider3834]

Just now, gfp said:

 

I have only a foggy memory of the prior discussion.  Does that mean the value for Fairfax went up from something like $70m USD to $136m USD?  

NAV has increased around 35% in 2024 but shares look to be trading flat over the last 12 mths - I am not sure how Fairfax are carrying this position 

 

 

 

 

 

[TwoCitiesCapital]

2 hours ago, glider3834 said:

NAV has increased around 35% in 2024 but shares look to be trading flat over the last 12 mths - I am not sure how Fairfax are carrying this position 

 

 

 

 

 

 

Flat over the last 12 months, but was up 300-400% in early 2024. 

 

Seems perhaps it SHOULD trade higher, but given the lack of information, the lack of liquidity, and the size - I'm not sure the price will ever reflect the value and we'll just have to wait as it self liquidates. 

[SafetyinNumbers]

2 hours ago, glider3834 said:

NAV has increased around 35% in 2024 but shares look to be trading flat over the last 12 mths - I am not sure how Fairfax are carrying this position 

 

 

 

 

 

My guess would be equity accounted. Did the financials just come out? If so, maybe we see that reported in Q2. 

[Viking]

Fairfax's equity portfolio continues to perform very well in QTD-Q2. The equities I track are up $1.6 billion or $73 per Fairfax share (pre-tax). The mark-to-market increase is about $700m or $32 per Fairfax share. This doesn't include mark-to-market gains from Digit (perhaps another $150 million?). Currency is a tailwind.

 

Edited June 5, 2025 by Viking

[Hoodlum]

The acquisition of the remaining shares of The Keg Royalty Income Fund is expected to close in Q3. 
 

https://financialpost.com/globe-newswire/the-keg-royalties-income-fund-enters-into-arrangement-agreement

Edited June 17, 2025 by Hoodlum

[SafetyinNumbers]

4 hours ago, Hoodlum said:

The acquisition of the remaining shares of The Keg Royalty Income Fund is expected to close in Q3. 
 

https://financialpost.com/globe-newswire/the-keg-royalties-income-fund-enters-into-arrangement-agreement

It’s interesting that it’s trading through. Is there an opportunity for a bump here to get a big shareholder over the line? 1832 seems to own ~15%.

[Hoodlum]

3 hours ago, SafetyinNumbers said:

It’s interesting that it’s trading through. Is there an opportunity for a bump here to get a big shareholder over the line? 1832 seems to own ~15%.

I would be surprised if Fairfax need to increase the offer any further.
 

[SafetyinNumbers]

50 minutes ago, Hoodlum said:

I would be surprised if Fairfax need to increase the offer any further.
 

That’s what I thought too but trading action suggests someone thinks otherwise.

[gfp]

[nwoodman]

A little late, but MS raised their PT on Eurobank to €3.53 in late May.  This puts them at a heady 1x’s book with a return on tangible equity of 15%.  The entire Greek banking sector is pretty much a no brainer as the table below shows but good to see MS returning to OW on Eurobank and really starting to consider the value created by the Hellenic acquisition
 

EEMEA_20250527_2301.pdf

Edited June 25, 2025 by nwoodman

[Hoodlum]

Thomas Cook India’s credit rating was upgraded and the credit agency specifically mentioned the upgrade to Fairfax by S&P as impacting the Thomas Cook upgrade.  This should bode well for all Fairfax owned businesses that owe debt.

 

https://www.crisil.com/mnt/winshare/Ratings/RatingList/RatingDocs/ThomasCookIndiaLimited_June 23_ 2025_RR_371239.html
 

The upgrade in rating follows the rating upgrade on the debt facilities of the parent, Fairfax Financial Holdings Ltd (Fairfax) by S&P Global Ratings to ‘A-/Stable’ from ‘BBB+/Positive’. The rating upgrade by S&P Global Ratings was owing to strengthened capitalisation, driven by improved earnings and capital management. S&P Global Ratings has also revised its outlook for Fairfax rating’s to stable reflecting its expectations of strong earnings, driven by underwriting and investment activities, while maintaining very strong capitalization.

 

Strong support from the parent, driven by the group’s strategic importance: The Thomas Cook India group is strategically important to Fairfax and has been one of the acquisition vehicles for the parent in India. Over the years, Fairfax has been extending regular funding support to the group via equity or preference shares mainly towards business acquisitions. During March 2021, the group received significant fund infusion worth Rs 436 crore of OCCRPS from Fairfax. This mitigated the impact of operating losses incurred over fiscals 2021-2022 and supported liquidity. Rs 303 crore out of Rs 436 crore was converted into equity in March 2022 and the remaining in September 2022. This indicates strong support received from the parent, Fairfax. Also, Fairfax has regular managerial oversight over the group, with three nominees on the board. Any change in the support philosophy of the parent towards the group shall be a key rating sensitivity factor.