Fairfax 2024

[SafetyinNumbers]

27 minutes ago, dartmonkey said:

So it looks like they could not find a buyer at the price they wanted.  We will find out in Feb what this acquisition was valued at.

 

...I don’t know if that’s the right read. It seems like Sagard was a seller but management was not so that explains why FFH wants to stay in the deal. Sagard likely wanted to run the process to make sure they were getting a fair price. Presumably it was a price that FFH can still earn a 15% return which is what PE would be looking for as well. 

 

Looks like I got what I hoped for, Fairfax hanging on, and it seems that it was Sagard that wanted to get out. I much prefer having Fairfax the buyer of an asset they know well, from a motivated seller. If at some point someone desperately wants to own the #1 hockey brand, maybe Fairfax would sell, but in the meantime, they have a nice asset at what may be a nice price.

I think they like to sell with management so incentives are aligned and they don’t get left holding the bag 

[Masterofnone]

For what it is worth, my niece and nephew who both have been upper level lacrosse players tell me that Cascade Lacrosse and Maverik Lacrosse are first tier brands. No close second in helmets.

[giulio]

 

[MMM20]

Can Bauer be Fairfax’s Sees Candy? A wide moat but niche regional brand that prints money without any great internal reinvestment prospects. Too small to really matter to the parent returns, but a symbol of what they’re looking for / why they’re special, and a signal to Canadian business owners that Fairfax is the best long term home when they decide to sell. Thoughts?

 

Edited October 1, 2024 by MMM20

[hardcorevalue]

It seems a much smaller TAM and less pricing power than See’s is famous for. 

[villainx]

1 hour ago, hardcorevalue said:

It seems a much smaller TAM and less pricing power than See’s is famous for. 

cause of global warming?

[MMM20]

1 hour ago, hardcorevalue said:

It seems a much smaller TAM and less pricing power than See’s is famous for. 

 

I need to learn more about Bauer, but I'd assumed they had solid pricing power. What self-respecting Canadian or Minnesotan wants to be seen with Temu skates? Only half joking. Is there a legit competitor?

[Gamecock-YT]

CCM for one. Warrior and True maybe lesser known brands but lots of people favor them over Bauer or CCM. Then you get down to Sherwood and Winwell. 

[Thrifty3000]

Great brands at a fair price. Whether mattresses, hockey sticks, banks, airports or container ships, I say the more the merrier.

Edited October 1, 2024 by Thrifty3000

[Jaygo]

Anyone notice some new sleep country advertisements. I dont watch too much TV so maybe they have been running the whole time and I never paid attention until the fairfax deal

 

I also noticed they dumped the Canada in the name. Maybe a US expansion?

[villainx]

1 hour ago, Jaygo said:

Anyone notice some new sleep country advertisements.

 

I'll be shopping for a new mattress soon, will share if Sleep Country is among the finalist!

[hardcorevalue]

Ikea has way better deals if you research the right one. They don’t have to spend a massive amount of the topline on marketing dollars. 

[SafetyinNumbers]

21 minutes ago, Haryana said:

 

Was going through this as was discussed. Like nitpicking, you meant, a matter of when Not if.

indeed, nice catch. It is indeed inevitable. The most important name to catch is Intact Financial which almost every active fund is overweight but has struggled to grow book value. Multiple expansion has helped it outperform other financials but not owning FFH gets more painful when it's in the 60 and when its a bigger weight than IFC.

 

Although it might take a while as IFC will likely be issuing stock at 2.9x book value which will be accretive which increases its float weight. Meanwhile FFH is buying back shares which has the opposite effect. Growing 15%+/yr and multiple expansion more than offsets that though.

 

 

[Junior R]

2 year and 10 year both above 4% ...Should be good for fairfax if they want to extend any

[MMM20]

I missed this last week. CIBC's "index specialist" now thinks FFH is #1 in the queue for inclusion in the TSX 60, which would bring "close to 1mm shares of demand into the stock, representing ~15x its 30-day average daily volume." I'm guessing this is music to @SafetyinNumbers's ears and explains the recent strength. Here's hoping we eventually get to sell at a big premium to intrinsic value to know-nothing index investors. Sorry, grandma!

 

 

Edited October 7, 2024 by MMM20

[Luke]

11 minutes ago, MMM20 said:

I missed this last week. CIBC's "index specialist" now thinks FFH is #1 in the queue for inclusion in the TSX 60, which would bring "close to 1mm shares of demand into the stock, representing ~15x its 30-day average daily volume." I'm guessing this is music to @SafetyinNumbers's ears and explains the recent strength. Here's hoping we eventually get to sell at a big premium to intrinsic value to know-nothing index investors. Sorry, grandma!

 

 

Amazing when it happens, thanks for sharing.

[Thrifty3000]

I wouldn’t be surprised if FFH breaks into the top 25 within 6 months, and the top 20 within 18 months.

[dartmonkey]

On 10/1/2024 at 11:18 AM, giulio said:

 

Aw shucks, and here I was thinking I was going to get some of it via Fairfax.

[villainx]

1 hour ago, Thrifty3000 said:

I wouldn’t be surprised if FFH breaks into the top 25 within 6 months, and the top 20 within 18 months.

 

Okay to buy here?  

[Thrifty3000]

6 hours ago, villainx said:

 

Okay to buy here?  

 

Well, any veteran investor worth his salt would say if you have to ask then it's not okay. But, I'm pretty sure I'm not worth my salt, so I'm going to say you SHOULD invest - however, that recommendation comes with a caveat...

 

I recommend taking a "starter position" of, say, 1% of your portfolio, or whatever amount gives you enough skin in the game to incentivize you to do the requisite research to ascertain not only a conviction buy price, but also a conviction exit price.

 

At the very least I recommend reading Viking's thesis and maybe the last decade or so of Prem's annual letters.
 

After you do that, then if you still CAN’T succinctly defend your conviction buy and sell prices I recommend exiting your starter position. However, if you CAN defend them then I say set your trade triggers accordingly and welcome to the FFH party.

 

Hope this helps.

Edited October 8, 2024 by Thrifty3000

[villainx]

Thank you!

 

I had a starter position.  Then I made what I thought was a full position.  Now I'm thinking to get more concentrated.  I know, if it happens, I'm okay seeing it rise.  I'm just looking for new entry, just a matter of patience.

[Thrifty3000]

11 hours ago, villainx said:

Thank you!

 

I had a starter position.  Then I made what I thought was a full position.  Now I'm thinking to get more concentrated.  I know, if it happens, I'm okay seeing it rise.  I'm just looking for new entry, just a matter of patience.

Okay, well, if you have to ask then you shouldn’t buy. Haha

[Junior R]

On 10/7/2024 at 2:14 PM, villainx said:

 

Okay to buy here?  

you might get your day under $1600 CAD lol

[Munger_Disciple]

https://www.reuters.com/business/finance/hurricane-milton-could-cost-insurers-60-bln-raise-reinsurance-rates-rbc-says-2024-10-09/

 

No one knows what the actual damage from Milton would be but this analyst thinks insured loss in the range of $60-100B for the industry. Does this imply roughly 1.25%, or up to $1.25B hit to Fairfax (pre-tax)?

Edited October 10, 2024 by Munger_Disciple

[SafetyinNumbers]

Buybacks continued in September