Fairfax stock positions

[Hoodlum]

S&P upgraded Greek banks including Eurobank to positive today.  So it looks like another rating upgrade could be coming.  
 

https://www.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/3508269

[Hoodlum]

32 minutes ago, UK said:

Not bad for a bank from non investable region:)

 

It will be interesting to look back on Fairfax's Greece investments in a few years. once they have all been monetized.  Investors all over have started to recognize the potential with Greek businesses.  Last month, Brookfield entered into a partnership with Domes Resorts in Greece and may be looking at further investment opportunities in the Hotel/Resort sector.  It is only a matter of time before the markets start to recognize what Metlen has built up in Greece as well.   

[UK]

1 hour ago, Hoodlum said:

 

It will be interesting to look back on Fairfax's Greece investments in a few years. once they have all been monetized.  Investors all over have started to recognize the potential with Greek businesses.  Last month, Brookfield entered into a partnership with Domes Resorts in Greece and may be looking at further investment opportunities in the Hotel/Resort sector.  It is only a matter of time before the markets start to recognize what Metlen has built up in Greece as well.   

All formerly problematic southern Europe countries are doing great, after covid/tourism slump, but perhaps especially Greece still has long runway, after taking quite hard medicine and starting lean and from the low point. Could also continue for quite a while. Banks in Greece or Cyprus are in very oligopolic market, plain vanilla and also clean and shining after years of purgatory:). They are not dirty cheap anymore, but still cheap/not expensive. Wheather it is a better investment vs FFH itself at this point, probably not, especially risk adjusted (idea for capital relocation for FFH?). The only big risk I could imagine for the sector is the return of low rates again. And if you are not investing in a currencies or something else macro, talking about Europe as a whole does not make much sense.

[Viking]

Do fundamentals matter? Fairfax’s largest equity investment, Eurobank, is up $1.2B YTD-2026 (~$50/share pre-tax). “Hidden value” is ~$3.1B, or $135/share pre-tax (adjusting excess of MV over CV of $3.3B for Q4 results and Jan).

 

Fairfax is not a traditional P/C insurance company. Pretending it is means you have to ignore fundamentals/facts. Is that rational? No. But it is much easier. 

 

What we are seeing play out over the past week is very normal for Fairfax. Improving fundamentals and a much lower share price. 

 

The reason it doesn't bother me is because it will give Fairfax the opportunity to continue to buy back an enormous amount of shares at a cheap price. Let's hope the stock goes even lower - crazy cheap is even better!

 

Most investors and analysts do not understand Fairfax's business model. As a result, the model they are using doesn't work. What is the solution? It's not complicated (in their eyes)... Fairfax needs to change and get with the program.

----------

"If all you have is a hammer, everything looks like a nail." When you only have one way to analyze companies in an industry - even when it is inappropriate. 

 

Edited January 27 by Viking

[Parsad]

5 minutes ago, Viking said:

 

Most investors and analysts do not understand Fairfax's business model. As a result, the model they are using doesn't work. What is the solution? It's not complicated (in their eyes)... Fairfax needs to change and get with the program.

 

 

LOL!  I like that!  Cheers!

[Viking]

3 hours ago, Parsad said:

 

LOL!  I like that!  Cheers!

 

@Parsad, I am getting deja vu with Fairfax! We are seeing a widening divergence in fundamentals and the company's stock valuation.

• The best example was 2007/2008 when they were sitting on billions in CDS gains and the stock price was not responding. It took a while for results to show up in the financials. and when they did... the stock did ok  
• Perhaps a better comparison to today is back in late 2000 when their stock portfolio started ripping higher and the stock barely moved. And then Fairfax reported results and everyone else learned what we already knew - and even then the stock was slow to respond. 

Today, hidden value is blowing out. And we are getting crickets from analysts (and most investors). Of course, much more is going on at Fairfax. Super interesting. Funny however things don't change. 

Edited January 28 by Viking

[Maverick47]

26 minutes ago, Viking said:

 

@Parsad, I am getting deja vu with Fairfax! We are seeing a widening divergence in fundamentals and the company's stock valuation.

• The best example was 2007/2008 when they were sitting on billions in gains and the stock price was not responding. It took a while for results to show up in the financials. and when they did... the stock did ok  
• Perhaps a better comparison to today is back in late 2000 when their stock portfolio started ripping higher and the stock barely moved. And then Fairfax reported results and everyone else learned what we already knew - and even then the stock was slow to respond. 

Today, hidden value is blowing out. And we are getting crickets from analysts (and most investors). Of course, much more is going on at Fairfax. Super interesting. Funny however things don't change. 

History doesn’t repeat, but it does rhyme….

[Maverick47]

The only thing better than me having dry powder to take advantage of the market’s mispricing, is Fairfax having dry powder.

[Hektor]

12 hours ago, Viking said:

 

@Parsad, I am getting deja vu with Fairfax! We are seeing a widening divergence in fundamentals and the company's stock valuation.

• The best example was 2007/2008 when they were sitting on billions in CDS gains and the stock price was not responding. It took a while for results to show up in the financials. and when they did... the stock did ok  
• Perhaps a better comparison to today is back in late 2000 when their stock portfolio started ripping higher and the stock barely moved. And then Fairfax reported results and everyone else learned what we already knew - and even then the stock was slow to respond. 

Today, hidden value is blowing out. And we are getting crickets from analysts (and most investors). Of course, much more is going on at Fairfax. Super interesting. Funny however things don't change. 

@Viking Has this led you to add to your core (not flex) FFH holding? 

[Txvestor]

19 hours ago, Hoodlum said:

 

It will be interesting to look back on Fairfax's Greece investments in a few years. once they have all been monetized.  Investors all over have started to recognize the potential with Greek businesses.  Last month, Brookfield entered into a partnership with Domes Resorts in Greece and may be looking at further investment opportunities in the Hotel/Resort sector.  It is only a matter of time before the markets start to recognize what Metlen has built up in Greece as well.   

This new EU-India as well as EU-Mercosur trade deals can't be a bad thing for Eurobank. 
Fairfax with its significant Greek and Indian assets in particular is well positioned to capitalize. 

[dartmonkey]

Eurobank continues its stunning run, now up from €3.425 at year end 2025 to €4.308, i.e. 26% in less than a month, or higher if you consider the fact that the Euro is up 2% against the US dollar. Fairfax's owned 1178m shares at the end of Q3, representing about 32.4% of Eurobank, so if they still own those shares, that would now be worth a stunning $6.1b (at €4.33; the price keeps moving up even as I'm writing this...)

 

As Viking pointed out recently, this means that the 'hidden value', i.e. the difference between the market value of FFH's stake and the carrying value on Fairfax's books has gone from $US2b to over $3b. However, Fairfax does count its full share of Eurobank's earnings, which for Q3 (or possibly for Q2 - they may be reporting Eurobank's earnings with a one trimester lag) were $140.7m. Eurobank is likely to end up with about E1.4b of net income in 2025, and at the average exchange rate in 2025 that would mean Fairfax's share would be worth 1400*1.14*.324=$517m. 

 

So book value rules means there is a lot of hidden book value, but the earnings are in plain sight, so if you are looking at Fairfax from an earnings perspective, there is no extra hidden value. And Fairfax's share of Eurobank's net income by itself represents more than 10% of Fairfax's projected $4.7-5b or so in earnings.

 

Questions for others that occurred to me while writing this:

(i) is there a reporting lag for Eurobank's results? I presume there must be, since Eurobank reports in late February (Feb 27 last year) and Fairfax in mid-February (Feb 13 last year)

(ii) what is the Canadian tax treatment of dividends received from an associate with 32% ownership?

(iii) Fairfax made $3534m in the first 3 quarters of 2025 (net of minority interests); Q4 was quiet from an underwriting perspective, and there will probably be some additional gains from obligatory Eurobank sales and increased Eurobank earnings, the $316m Orla sale, and the mark to market gains, principally Orla and the total return swaps (about $500m between them.) Is it crazy to think that Fairfax might get to $5b in net income in 2025?

[Viking]

1 hour ago, Hektor said:

@Viking Has this led you to add to your core (not flex) FFH holding? 

@Hektor, my core position in Fairfax stays the same. I am happy to build a flex position on weakness (and sell on strength). I am happy with a 6 to 8% return with my flex positions. I was able to do it a couple of times in 2025. I have been adding again. 

[Hektor]

1 hour ago, Viking said:

@Hektor, my core position in Fairfax stays the same. I am happy to build a flex position on weakness (and sell on strength). I am happy with a 6 to 8% return with my flex positions. I was able to do it a couple of times in 2025. I have been adding again. 

Thanks @Viking

[SafetyinNumbers]

5 hours ago, dartmonkey said:

i) is there a reporting lag for Eurobank's results? I presume there must be, since Eurobank reports in late February (Feb 27 last year) and Fairfax in mid-February (Feb 13 last year)

They get included in FFH earnings in a one quarter lag. Same as Poseidon, Exco and probably the rest of the equity accounted positions. 
 

5 hours ago, dartmonkey said:

ii) what is the Canadian tax treatment of dividends received from an associate with 32% ownership?

I don’t think it’s relevant. The position is owned by the insurance subsidiaries 

 

 

[Crip1]

5 hours ago, Viking said:

@Hektor, my core position in Fairfax stays the same. I am happy to build a flex position on weakness (and sell on strength). I am happy with a 6 to 8% return with my flex positions. I was able to do it a couple of times in 2025. I have been adding again. 

The 6 month low is roughly US$1,550 and we're getting pretty close to that. That was the day before Q3 earnings were released. i am considering a short term add above my already over-weighted position and would expect to sell into the strength once Q4 earnings are released.

 

-Crip

[Viking]

6 hours ago, Crip1 said:

The 6 month low is roughly US$1,550 and we're getting pretty close to that. That was the day before Q3 earnings were released. i am considering a short term add above my already over-weighted position and would expect to sell into the strength once Q4 earnings are released.

 

-Crip

P/BV(YE) = 1.3 ($1,638/$1,255) looks pretty cheap to me. At the same time you get a couple of other things for free:

• Hidden value to YE2025 ($3.5B, conservatively calculated). This will show up as future earnings.
• Increase in equity holdings in Jan (~$1.9B)
• $250 million gain when Eurobank closes in Q1 (plus $900 million in cash, less the $ for Cypress P/C insurance)

A company generating about $4.5 to $5B in earnings. And a management team that is best-in-class at capital allocation (and likely thinks their stock is cheap).

Edited January 29 by Viking

[dartmonkey]

14 hours ago, SafetyinNumbers said:

20 hours ago, dartmonkey said:

ii) what is the Canadian tax treatment of dividends received from an associate with 32% ownership?

I don’t think it’s relevant. The position is owned by the insurance subsidiaries 

Do you mean that each subsidiary has a small share, not enough to qualify for any tax reduction on dividends received?

 

In any case, from what I can see, Canada doesn’t tax dividends received from other companies, regardless of the size of the holding, in order to avoid triple taxation, different from the US where some tax is paid, the amount depending on whether there is <20% ownership (50% deduction), 20-80% ownership (65% deduction) or >80% ownership (100% deduction.)

[SafetyinNumbers]

30 minutes ago, dartmonkey said:

Do you mean that each subsidiary has a small share, not enough to qualify for any tax reduction on dividends received?

 

In any case, from what I can see, Canada doesn’t tax dividends received from other companies, regardless of the size of the holding, in order to avoid triple taxation, different from the US where some tax is paid, the amount depending on whether there is <20% ownership (50% deduction), 20-80% ownership (65% deduction) or >80% ownership (100% deduction.)

No, I mean to say each insurance subsidiary has different jurisdictions where they own the shares so I don’t think anything flows back to the Canadian holdco until it gets a dividend from each respective  insurance subsidiary. 

[gfp]

22 minutes ago, SafetyinNumbers said:

No, I mean to say each insurance subsidiary has different jurisdictions where they own the shares so I don’t think anything flows back to the Canadian holdco until it gets a dividend from each respective  insurance subsidiary. 

 

Don't think that is correct.

 

Fairfax files a consolidated tax return.  Dividends from subsidiaries to the holding company are not taxable events (a big part of the entire model that Berkshire popularized).

 

Eurobank is considered a "Foreign Affiliate" because Fairfax owns so much.  It is also an operating business not a passive investment vehicle.

 

I believe the tax treaty between Canada and Greece would result in a 5% withholding tax on the dividend by Greece.

 

Since they own so much of Eurobank that Eurobank that is considered a Foreign Affiliate and because Eurobank already paid income tax on its earnings, it is quite possible that the 5% is all the tax on dividends that is owed in Canada.

 

Any Canadian tax accountants here?

[Hoodlum]

With the signing of the EU and India Free trade agreement this week, the Cyprus Business/Investment event in Mumbai yesterday could not have been better timed.  Eurobank led this event.  

 

https://cyprus-mail.com/2026/01/29/eurobank-at-the-centre-of-new-financial-bridge-between-india-and-cyprus

 

The international DNA of the Cypriot banking sector remains one of the most important advantages for foreign investors, he further explained.

 

To support this strategy, Eurobank has already established a dedicated India Desk to facilitate the onboarding of Indian companies and multinational corporations moving into Cyprus.

 

The group is currently preparing for its next major milestone which involves opening a representative office in Mumbai within the city’s financial district in the coming months.

 

“Eurobank’s bridge-building role extends across key industries,” the bank stated. “In technology, the Group has partnered with Fairfax Digital Services and LTIMindtree to establish a Global Delivery Center in Pune supporting Eurobank’s European operations, while also backing advanced AI initiatives headquartered in Cyprus.”

 

“In financial innovation, Eurobank has signed a landmark MoU with NPCI International to deploy India’s Unified Payments Interface (UPI) in Greece and Cyprus, enabling real-time, low-cost cross-border payments,” the bank added. “In tourism, Eurobank and the IGC Council facilitated the entry of Thomas Cook India into Cyprus, strengthening people-to-people and business travel links.”

[KFRCanuk]

Foran is up YTD. Down today.

 

If you believe Gemini

 

[UK]

4 hours ago, Hoodlum said:

With the signing of the EU and India Free trade agreement this week, the Cyprus Business/Investment event in Mumbai yesterday could not have been better timed.  Eurobank led this event.  

 

https://cyprus-mail.com/2026/01/29/eurobank-at-the-centre-of-new-financial-bridge-between-india-and-cyprus

 

The international DNA of the Cypriot banking sector remains one of the most important advantages for foreign investors, he further explained.

 

To support this strategy, Eurobank has already established a dedicated India Desk to facilitate the onboarding of Indian companies and multinational corporations moving into Cyprus.

 

The group is currently preparing for its next major milestone which involves opening a representative office in Mumbai within the city’s financial district in the coming months.

 

“Eurobank’s bridge-building role extends across key industries,” the bank stated. “In technology, the Group has partnered with Fairfax Digital Services and LTIMindtree to establish a Global Delivery Center in Pune supporting Eurobank’s European operations, while also backing advanced AI initiatives headquartered in Cyprus.”

 

“In financial innovation, Eurobank has signed a landmark MoU with NPCI International to deploy India’s Unified Payments Interface (UPI) in Greece and Cyprus, enabling real-time, low-cost cross-border payments,” the bank added. “In tourism, Eurobank and the IGC Council facilitated the entry of Thomas Cook India into Cyprus, strengthening people-to-people and business travel links.”

Yes, Cyprus is like Ireland in EU, British law, very smart policies/taxes, especially after cleaning most Russian dirty money stuff etc (except tourists). Not only India or China, it is a very natural place to be for lot of middle east capital (and people). And BOCH, with 40 like market share, is a ten bagger from post Covid lows and still not that expensive:). Zero capital gain tax btw, it is a little to hot in the summer though:)

 

Edited January 29 by UK

[SafetyinNumbers]

3 hours ago, KFRCanuk said:

Foran is up YTD. Down today.

 

If you believe Gemini

 

FFH owns ~54% of GFR via WEF III. I think b/c of the fund wrapper we will mark it to market as well. We could exceed BMO’s 2026 capital gains expectations in Q1. Of course, we don’t get credit for the equity accounted names that are having big year to date performances like Eurobank and Dexterra. 
 

 

[jbwent63]

12 hours ago, gfp said:

 

Don't think that is correct.

 

Fairfax files a consolidated tax return.  Dividends from subsidiaries to the holding company are not taxable events (a big part of the entire model that Berkshire popularized).

 

Eurobank is considered a "Foreign Affiliate" because Fairfax owns so much.  It is also an operating business not a passive investment vehicle.

 

I believe the tax treaty between Canada and Greece would result in a 5% withholding tax on the dividend by Greece.

 

Since they own so much of Eurobank that Eurobank that is considered a Foreign Affiliate and because Eurobank already paid income tax on its earnings, it is quite possible that the 5% is all the tax on dividends that is owed in Canada.

 

Any Canadian tax accountants here?

The Fairfax Canadian holding company and all other Canadian subsidiaries file individual returns, unfortunately there is no consolidated corporate income tax returns here in Canada. The remainder of your post is accurate I believe. Assuming the profits earned are considered active income (aka safe income), the dividends would not be taxable in Canada. Dividends paid by one Canadian corporation to another do not attract tax in the recipient. There are thin cap rules that one must be careful of, but for insurance subs this would never be an issue.

[Hoodlum]

It looks like Point North Capital will be selling their shares for the AGT Food IPO, with Fairfax and Murad not selling theirs.  Additional issuing of funds would be used to pay down the debt at AGT.  

 

https://www.realagriculture.com/2026/02/agt-food-ingredients-files-paperwork-for-shares-to-go-public/

 

According to the Jan. 30 preliminary prospectus, AGT plans to use the proceeds from the share sale to reduce debt servicing costs and to facilitate share sales by existing shareholders. The document shows the company expects the reduction in annual finance expense would be $43.7 million, resulting in improved net earnings and cash flow.

 

Primary shareholders Fairfax Financial Holdings nor president and CEO Murad Al-Katib are selling their common shares, the company says.

 

AGT says it has applied to have the offered shares listed on the Toronto Stock Exchange under the symbol “AGTF," but conditional approval has not yet been granted by the TSX, as of January 30.

 

AGT was publicly-traded on the TSX from 2007 to 2019, when it was taken private by a group led by CEO Murad Al-Katib, Fairfax Financial, and Point North Capital.

 

AGT employed around 2,950 people as of 2024, with a global footprint of 39 manufacturing facilities across five continents.

 

The company reported revenue of C$3.2 billion and adjusted EBITDA of $192 million for the twelve-month period ending in September 2025.

 

Edited February 2 by Hoodlum