Fairfax stock positions

dartmonkey · February 6

4 hours ago, Hoodlum said:

While difficult to determine, I think that Fairfax has close to a $100M gain on UAA YTD ($5/share).

It looks like they had 63m shares at the end of January, and eyeballing the prices, these might be:

6m in September 2025 at about $5

37m in December 2025 at about $4.1

20m in January 2026 at about $6.10.

If that's right, their cost basis is about $340m, for an average price of $4.82.

At today's close of $7.33, up $1.18 on Q3 results, that would mean their stake is now worth $462m, for a paper gain of $122m. Not shabby.

They are guiding to a forward year EPS of $0.11, meaning they are at 67x 2026 earnings, which sounds awful, for a company with declining revenues and shrinking margins. But that is a bit deceptive, because their year end is March 31st, so when they talk about 2026 earnings, they are talking about the known past 3 quarters plus the unknown future quarter (Q4) which ends on March 31st. So far in their year '2026', they have lost .31c per share, so to finish the year at +0.11, they would have to make 0.42/share in Q4, which would be back to previous years' levels, meaning they are making enough to be back on track for $0.50-$1 annual per share earnings again, and the price of $7.33 would be quite reasonable.

So I guess Mr Market is giving them the benefit of the doubt, and believing they have already turned things around. I hope he is right, but so far, so good.

Edited February 6 by dartmonkey

SafetyinNumbers · February 6

1 minute ago, dartmonkey said:

So I guess Mr Market is giving them the benefit of the doubt, and believing they have already turned things around. I hope he is right, but so far, so good.

Big short interest and much tighter float might be helping.

Viking · February 7

AGT IPO - A World of Opportunity

Ok. Here is my first take on the AGT IPO.

As per usual, please let me know if you see any mistakes in my math/logic. One of the big strengths of this board is we all get the opportunity to post our work and get input from other board members. We all learn and improve our understanding along the way. Thank you.

What key take-aways on this transaction do others have? What am I missing?

AGT has been a bit of a mystery holding since Fairfax took it private in 2018. The company has been busy transforming its business (significantly reducing the volatility in earnings). In 2025 it divested non-core rail assets. With the IPO it significantly deleverages the balance sheet.

AGT is another example of what a good partner Fairfax is. Patient. Supportive. Demanding - in the right sort of way. The goal at Fairfax is to get the company in a position to succeed. AGT looks like mission accomplished. The company has a dynamic founder/CEO. Post IPO it will have a strong balance sheet. The company is profitable, with growth funded from internal cash flow.

Pre-2018 version of AGT was ‘old Fairfax.’ It was not positioned to success as a public company: volatile earnings with a leveraged balance sheet - what could possibly go wrong? 2026 (post IPO) version of AGT is ’new Fairfax.’ This is another example of how much Fairfax has improved its investment framework over the past 8 or so years (from the 2017 and earlier period). The difference is stark.

AGT is also further proof that Fairfax is largely done fixing past mistakes. It has been a long road (8 years) for Fairfax. Hard work. Tough decisions. Lots of write downs along the way.

AGT is lead by a very dynamic and entrepreneurial CEO, Murad Al-Katib. AGT will be an interesting company to watch moving forward - quite literally, the company has a world of opportunity.

All numbers are C$ unless indicated otherwise.

1.) Share count - Post-IPO Assumptions

$28 share price (mid-point of $26 - $30 offer price)
Over-allotment option: not exercised (to keep the analysis simple)

2.) Capital Structure Transformation

IPO materially reshapes AGT’s balance sheet:

Fairfax exercises warrants, eliminating Sponsor Notes.
IPO proceeds of ~$425M are used to pay down Prior Bank Facilities

Post IPO impact:

Long term debt falls sharply from ~$1.0B to ~$272M.
Annual finance expense declines by $43.7M.
Equity increases from ~$283M to ~$1.6B

Puts AGT in a very strong position moving forward as a publicly traded company.

3.) Fairfax’s Ownership Stake Post-IPO

Pre-IPO estimate: ~$526M?

Equity: $186M? (65.7% of $283.6M?)
Sponsor Notes/Warrants: $340 million

Post-IPO

Market value: $813M, or US$595M
Ownership: 52.2% (retains control)

At roughly US$600M in market value, AGT would rank around the ~10th largest equity holding within Fairfax’s equity portfolio.

4.) Potential Dividend Framework

Assume a dividend of $0.80/share:

Yield: ~2.9%
Total annual cash cost: ~$45M

Notably, this is approximately equal to the reduction in annual finance expense from deleveraging, suggesting a possible framework for a sustainable initial dividend.

Edited February 7 by Viking

Viking · February 7

On 2/6/2026 at 5:01 AM, Hoodlum said:

AGT Foods Prospectus

https://www.sedarplus.ca/csa-party/records/document.html?id=4637fac564261b84ab61c4713f6f4c4df821dcfc0d38162f90a331af7f4c4d2a

@Hoodlum provided a link to AGT's prospectus.

Hoodlum · February 7

1 hour ago, Viking said:

AGT IPO - A World of Opportunity

Ok. Here is my first take on the AGT IPO.

As per usual, please let me know if you see any mistakes in my math/logic. One of the big strengths of this board is we all get the opportunity to post our work and get input from other board members. We all learn and improve our understanding along the way. Thank you.

What key take-aways on this transaction do others have? What am I missing?

AGT has been a bit of a mystery holding since Fairfax took it private in 2018. The company has been busy transforming its business (significantly reducing the volatility in earnings). In 2025 it divested non-core rail assets. With the IPO it significantly deleverages the balance sheet.

AGT is another example of what a good partner Fairfax is. Patient. Supportive. Demanding - in the right sort of way. The goal at Fairfax is to get the company in a position to succeed. AGT looks like mission accomplished. The company has a dynamic founder/CEO. Post IPO it will have a strong balance sheet. The company is profitable, with growth funded from internal cash flow.

Pre-2018 version of AGT was ‘old Fairfax.’ It was not positioned to success as a public company: volatile earnings with a leveraged balance sheet - what could possibly go wrong? 2026 (post IPO) version of AGT is ’new Fairfax.’ This is another example of how much Fairfax has improved its investment framework over the past 8 or so years (from the 2017 and earlier period). The difference is stark.

AGT is also further proof that Fairfax is largely done fixing past mistakes. It has been a long road (8 years) for Fairfax. Hard work. Tough decisions. Lots of write downs along the way.

AGT is lead by a very dynamic and entrepreneurial CEO, Murad Al-Katib. AGT will be an interesting company to watch moving forward - quite literally, the company has a world of opportunity.

All numbers are C$ unless indicated otherwise.

1.) Share count - Post-IPO Assumptions

$28 share price (mid-point of $26 - $30 offer price)

Over-allotment option: not exercised (to keep the analysis simple)

2.) Capital Structure Transformation

IPO materially reshapes AGT’s balance sheet:

Fairfax exercises warrants, eliminating Sponsor Notes.

IPO proceeds of ~$425M are used to pay down Prior Bank Facilities

Post IPO impact:

Long term debt falls sharply from ~$1.0B to ~$272M.

Annual finance expense declines by $43.7M.

Equity increases from ~$283M to ~$1.6B

Puts AGT in a very strong position moving forward as a publicly traded company.

3.) Fairfax’s Ownership Stake Post-IPO

Pre-IPO estimate: ~$526M?

Equity: $186M? (65.7% of $283.6M?)

Sponsor Notes/Warrants: $340 million

Post-IPO

Market value: $813M, or US$595M

Ownership: 52.2% (retains control)

At roughly US$600M in market value, AGT would rank around the ~10th largest equity holding within Fairfax’s equity portfolio.

4.) Potential Dividend Framework

Assume a dividend of $0.80/share:

Yield: ~2.9%

Total annual cash cost: ~$45M

Notably, this is approximately equal to the reduction in annual finance expense from deleveraging, suggesting a possible framework for a sustainable initial dividend.

thanks @Viking for this detailed breakdown of AGT. Could you explain where you got the $283.6M in equity from. You had mentioned that is Canadian Dollars and the go private transaction in 2018 was for $436M Canadian.

Viking · February 7

17 minutes ago, Hoodlum said:

thanks @Viking for this detailed breakdown of AGT. Could you explain where you got the $283.6M in equity from. You had mentioned that is Canadian Dollars and the go private transaction in 2018 was for $436M Canadian.

@Hoodlum, good question. Go to point 2: Capital Structure. Column 1 is from the prospectus. I added column 2.

The prospectus put total equity at $283.6M at Sept 30, 2025.

What I am trying to estimate (very roughly) is what is Fairfax contributing (pre-IPO)? And what are they getting (post-IPO)? And what is the (rough) difference?

Edited February 7 by Viking

Hoodlum · February 7

11 minutes ago, Viking said:

@Hoodlum, good question. Go to point 2: Capital Structure. Column 1 is from the prospectus. I added column 2.

The prospectus put total equity at $283.6M at Sept 30, 2025.

What I am trying to estimate (very roughly) is what is Fairfax contributing (pre-IPO)? And what are they getting (post-IPO)? And what is the (rough) difference?

In terms of taking it back to 2018, I think we need Fairfax to help us out here.

thanks. I understand now.

Txvestor · February 8

5 hours ago, Viking said:

@Hoodlum, good question. Go to point 2: Capital Structure. Column 1 is from the prospectus. I added column 2.

The prospectus put total equity at $283.6M at Sept 30, 2025.

What I am trying to estimate (very roughly) is what is Fairfax contributing (pre-IPO)? And what are they getting (post-IPO)? And what is the (rough) difference?

Thank you for your efforts on keeping up with the fast paced deal making of late.
This is one of the annual letters I'm most looking forward to reading. Prem's usually quite good about bringing shareholders up to speed and there's a lot to write about this time.

Hoodlum · February 8

59 minutes ago, Txvestor said:

Thank you for your efforts on keeping up with the fast paced deal making of late.
This is one of the annual letters I'm most looking forward to reading. Prem's usually quite good about bringing shareholders up to speed and there's a lot to write about this time.

Yes, a lot has happened over the past year, some of which we may have already been forgotten about. Here are a few that come to my mind.

1. What percentage of The Keg was sold to LFG and for how much.

2. How did Sleep County perform during its first full year under Fairfax.

3. Vacatia had its first full year under Fairfax. The initial update after Q1 seemed very positive and I would like to hear more about this business and where they see it going.

4. Seaspan did a large number of new ship build orders this year so I am looking forward to another update on the growing business.

5. What are their plans with the Under Armour share acquisition. Is this a passive investment but longer term?

6. What has happened with the Kennedy Wilson take Private acquisition. This one seems to have gone quiet.

Not a company investment question but I am curious to see if there were any changes to the bond portfolio, specifically did they sell their remaining 30 year Treasuries.

There will be many other questions as well. It will be interesting to review the annual report and shareholders letter, along with what is said on the conference call.

Edited February 8 by Hoodlum

Viking · February 9

How is Fairfax’s equity portfolio performing YTD-2026? It is up in value by ~$1.4B, or ~$62/sh. Very strong start to the year. Big gainers? Eurobank, Orla (gold), CIB, UA (new) and Foran (copper). Q1 will also see ~$250M gain on sale of Eurolife.

Importantly, my tracker only captures the change in value of the public equities, which represents ~60% of total holdings. This means public equities are up ~8.8% to start the year (not the 5.2% in my summary below).

Of course the 40% of holdings that are not public are also going up in value.

For those who want to get into the weeds, my Excel tracker is attached below.

Fairfax Feb 2026.xlsx

Edited February 9 by Viking

SafetyinNumbers · February 9

1 hour ago, Viking said:

How is Fairfax’s equity portfolio performing YTD-2026? It is up in value by ~$1.4B, or ~$62/sh. Very strong start to the year. Big gainers? Eurobank, Orla (gold), CIB, UA (new) and Foran (copper). Q1 will also see ~$250M gain on sale of Eurolife.

Importantly, my tracker only captures the change in value of the public equities, which represents ~60% of total holdings. This means public equities are up ~8.8% to start the year (not the 5.2% in my summary below).

Of course the 40% of holdings that are not public are also going up in value.

For those who want to get into the weeds, my Excel tracker is attached below.

Fairfax Feb 2026.xlsx 357.01 kB · 2 downloads

We should get the Eurolife gain in Q1 as well. Still a long way to go until March 31 but already bodes well for Q1 earnings over $50/sh.

Hoodlum · February 9

36 minutes ago, SafetyinNumbers said:

We should get the Eurolife gain in Q1 as well. Still a long way to go until March 31 but already bodes well for Q1 earnings over $50/sh.

We may even see a gain from the AGT IPO in Q1, as the prospectus mentioned that the IPO would happen before their audited year end results become available.

Edited February 9 by Hoodlum

SafetyinNumbers · February 10

1 hour ago, Hoodlum said:

We may even see a gain from the AGT IPO in Q1, as the prospectus mentioned that the IPO would happen before their audited year end results become available.

Would they recognize a gain on a consolidated position if they aren’t selling any shares?

Txvestor · February 10

1 hour ago, Hoodlum said:

We may even see a gain from the AGT IPO in Q1, as the prospectus mentioned that the IPO would happen before their audited year end results become available.

We don't know what they have in their investment pipeline or plans they have for their cash on hand and what's coming in, but I can't imagine their TRS position staying at -350M if they do any significant amount of share buybacks. Of course we never know what share prices do.
Either way it's a solid investment for them until the share return to something resembling intrinsic value.
2 questions on that though.

-Do you all know of those gains are settled/paid up every Q or at the closing of the position?

-What is the carrying cost of this position?
May apologies if this has already been mentioned somewhere, but I can't remember seeing it.
Looking forward to the results later this week. I'm very bullish and see us landing in the $60-70 region.

Hoodlum · February 10

57 minutes ago, SafetyinNumbers said:

Would they recognize a gain on a consolidated position if they aren’t selling any shares?

I would have thought that going public and issuing new shares would have required that, but I may be mistaken.

Hoodlum · February 10

48 minutes ago, Txvestor said:

We don't know what they have in their investment pipeline or plans they have for their cash on hand and what's coming in, but I can't imagine their TRS position staying at -350M if they do any significant amount of share buybacks. Of course we never know what share prices do.
Either way it's a solid investment for them until the share return to something resembling intrinsic value.
2 questions on that though.

-Do you all know of those gains are settled/paid up every Q or at the closing of the position?

-What is the carrying cost of this position?
May apologies if this has already been mentioned somewhere, but I can't remember seeing it.
Looking forward to the results later this week. I'm very bullish and see us landing in the $60-70 region.

I do see the TRS loss getting reduced by the end of Q1. I don’t know the particulars of the TRS transaction.

gfp · February 10

7 minutes ago, Hoodlum said:

I would have thought that going public and issuing new shares would have required that, but I may be mistaken.

I think FFH will be at 52% ownership following the IPO, even with the full over allotment (which is primarily OMERS selling into the green shoe

SafetyinNumbers · February 10

19 minutes ago, Hoodlum said:

I do see the TRS loss getting reduced by the end of Q1. I don’t know the particulars of the TRS transaction.

Why Q1?

SafetyinNumbers · February 10

1 hour ago, Txvestor said:

Looking forward to the results later this week

Results are next week

Crip1 · February 10

8 minutes ago, SafetyinNumbers said:

Results are next week

I've not seen that announcement, can you post? I thought it was this week as well since they announced Q4 last year on February 13th.

-Crip

Hoodlum · February 10

19 minutes ago, SafetyinNumbers said:

Why Q1?

I believe the share price will rise gradually after the year end results, reducing the current TRS loss that Viking included in his YTD earnings report.

SafetyinNumbers · February 10

32 minutes ago, Crip1 said:

I've not seen that announcement, can you post? I thought it was this week as well since they announced Q4 last year on February 13th.

-Crip

It’s because they didn’t post an announcement this past Friday that I’m inferring with high confidence they are next week.

SafetyinNumbers · February 10

25 minutes ago, Hoodlum said:

I believe the share price will rise gradually after the year end results, reducing the current TRS loss that Viking included in his YTD earnings report.

So you think they will close out the TRS in Q1 to lock in the loss on the TRS in Q1 in order to manage earnings?

Hoodlum · February 10

18 minutes ago, SafetyinNumbers said:

So you think they will close out the TRS in Q1 to lock in the loss on the TRS in Q1 in order to manage earnings?

No, they will not close out the TRS. I just believe the share price will increase between now and end of Q1, reducing the current YTD marked to market loss that Viking presented.

SafetyinNumbers · February 10

New Fairfax investment in a Canadian listed company CVW.V

https://finance.yahoo.com/news/cvw-sustainable-royalties-announces-50-120300004.html

Fairfax stock positions

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