Hamburg Investor Posted February 15 Share Posted February 15 Quote "Book value per basic share at December 31, 2023 was $939.65 compared to $762.28 at December 31, 2022 (an increase of 24.7% adjusted for the $10 per common share dividend paid in the first quarter of 2023)." Book value grew $63.10 in q4 alone or 35.6% of the $177.37 bvps of 2023. That's an increase of 8.3% in q4 alone (in relation to year end 2023). Weightes shares outstanding in q4 just reduced by 1.1% / 23,076 in q4 2023 vs. 23,387 in q4 2022 (I don't have the YE numbers of 2022; still that will not move the needle) Link to comment Share on other sites More sharing options...
valuesource Posted February 15 Share Posted February 15 5 minutes ago, nwoodman said: @valuesource any chance you can delete your post. There are links to the release no need to cut and paste the whole thing and it makes the flow of this thread very distracting. Thanks in advance Done. Sorry, everyone seemed to be chomping at the bit to see the numbers and sometimes it takes 15 mins for Fairfax to put it up. Link to comment Share on other sites More sharing options...
nwoodman Posted February 15 Share Posted February 15 1 minute ago, valuesource said: Done. Sorry, everyone seemed to be chomping at the bit to see the numbers and sometimes it takes 15 mins for Fairfax to put it up. Many thanks . Great results and the increase in duration is just brilliant. When it comes to Bonds these guys really are Masters of the Universe. It is a treat to watch the balance sheet get stronger quarter by quarter. Link to comment Share on other sites More sharing options...
Santayana Posted February 15 Share Posted February 15 It's a real shame to see the Allied acquisition ruining the combined ratio like that. Excited to hear what Carson Block has to say about that on the call tomorrow. Link to comment Share on other sites More sharing options...
Ross812 Posted February 15 Share Posted February 15 Seeking alpha is reporting an earnings miss of $4.23. Not sure where the ~$177 estimate is coming from... Link to comment Share on other sites More sharing options...
Malmqky Posted February 15 Share Posted February 15 Guys, the book value is *intentionally* inflated because of IFRS 17 so the growth doesn’t matter and it’s probably overstated anyways!!! Just like the investment portfolio!!! Link to comment Share on other sites More sharing options...
valuesource Posted February 15 Share Posted February 15 Newswire services have a way of really cutting to the bone... Link to comment Share on other sites More sharing options...
StubbleJumper Posted February 15 Share Posted February 15 I never particularly like the Q4 release because it doesn't provide all of the details that are usually published during a quarter. We will have to wait another month to get all of the details that we like to see. That being said, the headline EPS number in the quarter is great. The market should respond favourably to it in the coming week and the putzes that have been stirring up shit should return to the woodwork. When you dig into the numbers a bit more, it's a bit of a mixed bag. -The most obvious point is that there's basically one bil of unrealised gains on fixed income, and it is unlikely that those bonds will be sold any time soon. We will see a nice pile of interest and divvies over the coming years, which is outstanding. But the $997m of unrealised gains on the bonds is low quality of earnings. I do, however, like how the fixed income port is structured for the coming years. -UW earnings are fantastic. That being said, the Gross Written numbers seem to be slowing. Crum grew its book during 2023, but it looks like the book grew at the cost of its CR. NB, Zenith and Allied had much smaller growth in Gross written, which probably means that price was the entire driver and that they actually wrote fewer policies (ie, if price is up 8% but your gross written is up 6%, that means you non-renewed 2% of your policies). ORH and Brit obviously dumped some business, and I guess we have to accept that it was a rational decision. Looking at company-wide core underwriting CRs, the lack of cats in 2023 appears to be a good thing, otherwise the consolidated CR in 2023 would have been higher than 2022. The only real bright spot were the international insurers which both grew their book and shrunk their CR. It will be interesting to listen to the conference call to hear whether the execs at FFH figure that the hard market still has legs because the numbers are really starting to slow. -Nice to see the share-count drop and looking forward to the more verbose report next month. SJ Link to comment Share on other sites More sharing options...
valuesource Posted February 15 Share Posted February 15 9 minutes ago, Ross812 said: Seeking alpha is reporting an earnings miss of $4.23. Not sure where the ~$177 estimate is coming from... I think it depends where you look for estimates. Reuters had a mean estimate of $52.15. Link to comment Share on other sites More sharing options...
Hektor Posted February 15 Share Posted February 15 7 minutes ago, StubbleJumper said: The most obvious point is that there's basically one bil of unrealised gains on fixed income, and it is unlikely that those bonds will be sold any time soon. We will see a nice pile of interest and divvies over the coming years, which is outstanding. But the $997m of unrealised gains on the bonds is low quality of earnings. I do, however, like how the fixed income port is structured for the coming years. I guess they can give up the nice interest stream and have the unrealized gains. Or, take the interest stream for as long as possible (either maturity or interest rates going down significantly), realize the (larger) gains and deploy it into a bigger income stream (hopefully) Link to comment Share on other sites More sharing options...
value_hunter Posted February 15 Share Posted February 15 23 minutes ago, Ross812 said: Seeking alpha is reporting an earnings miss of $4.23. Not sure where the ~$177 estimate is coming from... Yahoo's estimate is C$70.74 which is USD$52. meet. Link to comment Share on other sites More sharing options...
StubbleJumper Posted February 15 Share Posted February 15 18 minutes ago, Hektor said: I guess they can give up the nice interest stream and have the unrealized gains. Or, take the interest stream for as long as possible (either maturity or interest rates going down significantly), realize the (larger) gains and deploy it into a bigger income stream (hopefully) Well, with the bil of unrealised fixed income gains, if you hold those bonds to maturity (as I hope they will!) you will get the interest payment every year, but then the unrealised gains unwind as the bond gets closer and closer to maturity. So, accounting rules force them to recognize a bil in gains in 2023, but then that bil would appear as a combination of unrealised and realised losses over the next 7 or 8 years. That's why I say low quality of earnings now because it will be offset by a low quality of losses later. SJ Link to comment Share on other sites More sharing options...
Haryana Posted February 15 Share Posted February 15 A 50% increase in cash and investments in the holding company from $1.2 billion at the end of Q3. “We remain focused on being soundly financed and ended 2023 in a strong financial position with $1.8 billion in cash and investments in the holding company, our debt to capital ratio at 23.1%,” said Prem Watsa, Chairman and Chief Executive Officer. Link to comment Share on other sites More sharing options...
MungerWunger Posted February 15 Share Posted February 15 (edited) MW questions to management for tomorrow's earnings call: https://d.muddywatersresearch.com/content/uploads/2024/02/Fairfax_MWQuestionsForQ423Call.pdf Edited February 15 by MungerWunger Link to comment Share on other sites More sharing options...
gfp Posted February 15 Share Posted February 15 2 minutes ago, Haryana said: A 50% increase in cash and investments in the holding company from $1.2 billion at the end of Q3. “We remain focused on being soundly financed and ended 2023 in a strong financial position with $1.8 billion in cash and investments in the holding company, our debt to capital ratio at 23.1%,” said Prem Watsa, Chairman and Chief Executive Officer. To be fair, hadn't they sold the new bonds in Q4 but had not yet fully repaid the old bonds they were essentially refinancing? They just announced the March 15 redemption yesterday. The 2024 notes weren't redeemed until January 29th 2024. But Fairfax had already raised $400m of the later-expanded 6% offering in December. Link to comment Share on other sites More sharing options...
StubbleJumper Posted February 15 Share Posted February 15 6 minutes ago, Haryana said: A 50% increase in cash and investments in the holding company from $1.2 billion at the end of Q3. “We remain focused on being soundly financed and ended 2023 in a strong financial position with $1.8 billion in cash and investments in the holding company, our debt to capital ratio at 23.1%,” said Prem Watsa, Chairman and Chief Executive Officer. That's good to see, but it is important to do a bit of school-boy arithmetic about the post-dec 31 transactions. So, prior to Dec 31, FFH floated US$400m of notes and that will appear in today's balance sheet. On January 29th, FFH redeemed US$279m of notes. Then on or about Jan 19, FFH paid a US$15/sh divvy on about 24m shares. Then on Jan 12, FFH floated an additional US$200m in notes. Finally, yesterday FFH announced that it will redeem CAD$349m in notes on March 15. So, take that Dec 31 number released today, and net out all of the items that occurred subsequent to quarter's end and the holdco cash balance currently is a bit higher than it was at the end of Q3, but not drastically so. But, let's take any improvement that we can! SJ Link to comment Share on other sites More sharing options...
Tommm50 Posted February 15 Share Posted February 15 53 minutes ago, StubbleJumper said: Looking at company-wide core underwriting CRs, the lack of cats in 2023 appears to be a good thing, otherwise the consolidated CR in 2023 would have been higher than 2022. Note the premium reductions at Brit relate to trimming their gross and net property cat exposure. I believe this has also happened in other segments. I don't think Fairfax will be hit as hard in the future with Property Cat losses. Link to comment Share on other sites More sharing options...
MMM20 Posted February 16 Share Posted February 16 21 minutes ago, MungerWunger said: MW questions to management for tomorrow's earnings call: https://d.muddywatersresearch.com/content/uploads/2024/02/Fairfax_MWQuestionsForQ423Call.pdf Looks like another nothingburger. Link to comment Share on other sites More sharing options...
StubbleJumper Posted February 16 Share Posted February 16 22 minutes ago, MungerWunger said: MW questions to management for tomorrow's earnings call: https://d.muddywatersresearch.com/content/uploads/2024/02/Fairfax_MWQuestionsForQ423Call.pdf I love it! A homework assignment for FFH! Prem is going to tell them that there is more than enough disclosure that has been provided over the years and that they should go pound sand. SJ Link to comment Share on other sites More sharing options...
Xerxes Posted February 16 Share Posted February 16 1 minute ago, MMM20 said: Looks like another nothingburger. Maybe, it still take mindshare from CFO and CEO to prepare for tomorrow and deal with it. But what can I say: game is the game dawg. Link to comment Share on other sites More sharing options...
Hektor Posted February 16 Share Posted February 16 50 minutes ago, StubbleJumper said: Well, with the bil of unrealised fixed income gains, if you hold those bonds to maturity (as I hope they will!) you will get the interest payment every year, but then the unrealised gains unwind as the bond gets closer and closer to maturity. Thank you @StubbleJumper. Will this apply only if the rates remain at where they are today? Or will the unrealized gains increase if rates drop from here (and unrealized gains decrease or turn into unrealized loss if rates rise from here)? Link to comment Share on other sites More sharing options...
Hektor Posted February 16 Share Posted February 16 40 minutes ago, Haryana said: A 50% increase in cash and investments in the holding company from $1.2 billion at the end of Q3. I guess this makes @Parsad happy. He has been calling for a $2B at the holding company Link to comment Share on other sites More sharing options...
StubbleJumper Posted February 16 Share Posted February 16 Did I read this right? Today's release states that FFH's share of Exco's profit for 2023 was $129.1m and the Q3 release indicates that its carrying value on FFH's books was $418.3m, and those clowns are grousing that the position should be written down? I must confess that I wouldn't even know how to write down a position with that income number and that carrying value! SJ Link to comment Share on other sites More sharing options...
StubbleJumper Posted February 16 Share Posted February 16 3 minutes ago, Hektor said: Thank you @StubbleJumper. Will this apply only if the rates remain at where they are today? Or will the unrealized gains increase if rates drop from here (and unrealized gains decrease or turn into unrealized loss if rates rise from here)? If interest rates change between now and when the bonds mature, unrealized gains could increase or decrease as a result. But, one thing is certain. If they hold those treasuries until maturity, FFH will receive par for them at maturity ($1,000). Any unrealised gains or losses will disappear between now and then. SJ Link to comment Share on other sites More sharing options...
Hektor Posted February 16 Share Posted February 16 1 minute ago, StubbleJumper said: If interest rates change between now and when the bonds mature, unrealized gains could increase or decrease as a result. But, one thing is certain. If they hold those treasuries until maturity, FFH will receive par for them at maturity ($1,000). Any unrealised gains or losses will disappear between now and then. Link to comment Share on other sites More sharing options...
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