CIBC says Fairfax is likely to be added to the S&P/TSX 60 in December 2024 - sell decisions

[dartmonkey]

5 minutes ago, villainx said:

38 minutes ago, dartmonkey said:

and so the scramble to buy is likely to be much less hectic. 

 

so pullback and buying opportunity?

I see no reason for a pullback, no. My guess would be a modest incrase monday, say 5%, with an increase of 10% by the 19th. Hopefully I’m wrong and it plunges. 

[Hoodlum]

16 hours ago, dartmonkey said:

I see no reason for a pullback, no. My guess would be a modest incrase monday, say 5%, with an increase of 10% by the 19th. Hopefully I’m wrong and it plunges. 

Fairfax dropped 2.5% on Friday and it wasn’t long ago that FFH was at $2500.  I could see us getting to $2500 again on Monday, which would be a 5% increase from Thursday’s close. 
 

This should bode well for a big TRS gain in Q4.  No one would have been expecting this. 

[hardcorevalue]

Took me by surprise too!

 

A sad day for us buyback fans but the stock can only stay a secret for so long. 

 

With the continued incredible results, the index addition and the book coming out, we are clearly in a new era for the company.

 

Maybe even a NYSE re-list one day although I'm sure that will ruffle a lot of feathers given their history.

 

A big congrats to the FFH team on their transformation. 

 

 

[Phoenix01]

This does seem like potentially a wonderful holiday gift, however, I will wait for the results before celebrating.  That said, there are some really interesting tailwinds:

1) Earning growth (~$200/Sh in 2025 + TRS based on any large price movement)

- base assumption of 15% annual growth rate

- reduced preferred dividend payment ($50M/yr) starting 2026 (+$2.5/Sh)

- reduced non-controlling dividend (was $295M in 2024).  In 2024 FFH exercised options to buy back Brit non-controlling interest (~$100M/yr in non-controlling dividends - SWAG).  

- reduced non-controlling earnings (was $450M in 2024). In 2024 FFH exercised options to buy back Brit non-controlling interest (was $137M in 2024 in non-controlling earnings).   In 2025 Recipe bought back the non-controlling interest (now 100% owned by FFH), but has negligible impact. 

- remaining options on non-controlling interests for Allied that expire in September 2026 & call options on Odyssey that expire in 2029. Allied had non-controlling interest earning of $176M in 2024 and Odyssey of 128M in 2024.

2) Multiple growth

- Forced buying - Inclusion in S&P/TSX60 (extent is tbd)

- Forced buying by FFH - Treasury purchases to fund employee share -based awards (208k shares purchased in 2024).

- Limited float - At end Q3 there were 21.3M shares outstanding.  Adjusting for 1.5M multiple-voting; 800k internal interest adjustment (the 62 company); 1.8M Treasury shares; 1.2M Shares issued as employee share based awards; 500k shares held by Prem; give an available float of ~ 15.5M Shares.  If you further reduced by the TRS (1.7M shares) this give a float of 13.8M shares.

3) Virtuous TRS feedback loop

- as the earnings grow, the "value" of the TRS appreciates (base assumption of 15% annually)

- as the multiple grows, the TRS impact on earnings & cashflow increases on top of the 15%

- In the first 9 months of 2025 the TRS produced gains of $585M.  We are down so far in Q4, but I think that might reverse by YE.  In 2024 the TRS produced gains of $1,033M and in 2023 $635M.

 

[Hoodlum]

30 minutes ago, Phoenix01 said:

This does seem like potentially a wonderful holiday gift, however, I will wait for the results before celebrating.  That said, there are some really interesting tailwinds:

1) Earning growth (~$200/Sh in 2025 + TRS based on any large price movement)

- base assumption of 15% annual growth rate

- reduced preferred dividend payment ($50M/yr) starting 2026 (+$2.5/Sh)

- reduced non-controlling dividend (was $295M in 2024).  In 2024 FFH exercised options to buy back Brit non-controlling interest (~$100M/yr in non-controlling dividends - SWAG).  

- reduced non-controlling earnings (was $450M in 2024). In 2024 FFH exercised options to buy back Brit non-controlling interest (was $137M in 2024 in non-controlling earnings).   In 2025 Recipe bought back the non-controlling interest (now 100% owned by FFH), but has negligible impact. 

- remaining options on non-controlling interests for Allied that expire in September 2026 & call options on Odyssey that expire in 2029. Allied had non-controlling interest earning of $176M in 2024 and Odyssey of 128M in 2024.

2) Multiple growth

- Forced buying - Inclusion in S&P/TSX60 (extent is tbd)

- Forced buying by FFH - Treasury purchases to fund employee share -based awards (208k shares purchased in 2024).

- Limited float - At end Q3 there were 21.3M shares outstanding.  Adjusting for 1.5M multiple-voting; 800k internal interest adjustment (the 62 company); 1.8M Treasury shares; 1.2M Shares issued as employee share based awards; 500k shares held by Prem; give an available float of ~ 15.5M Shares.  If you further reduced by the TRS (1.7M shares) this give a float of 13.8M shares.

3) Virtuous TRS feedback loop

- as the earnings grow, the "value" of the TRS appreciates (base assumption of 15% annually)

- as the multiple grows, the TRS impact on earnings & cashflow increases on top of the 15%

- In the first 9 months of 2025 the TRS produced gains of $585M.  We are down so far in Q4, but I think that might reverse by YE.  In 2024 the TRS produced gains of $1,033M and in 2023 $635M.

 

Thanks for summarizing your thoughts @Phoenix01   

 

Q4 results will likely also have a reserve release as this is when Fairfax does their releases.  For 2023 this was $310M, while for 2024 it was $594M.  These releases are now for the hard market period and I expect this to continue for the next 2-3 years due to the delay after which the reserves are released.  It is difficult to predict what it would be, but we could conceivably have a gain from this of $10-$20+/share.

 

The Allied minority share buyback seems like a great use of spare cash.  I believe this would be purchased at ~$800M and based on the 2024 $176M earning from this minority interest, an obvious great use of capital.  It would not surprise me if this is announced before year end. 

 

 

 

 

[backtothebeach]

Market maker in Frankfurt is like "WTF is going on..." Already traded 3x daily average volume in the first half hour. I grabbed a few for a trade.

 

[UK]

Well, this is exciting news for sure! Fortunately I was already back to my max FFH position limit when it was trading near 2200 CAD awhile ago...but, the question is, what would you do, if you have an opportunity to buy even more FFH near Friday close price?

[UK]

2 minutes ago, backtothebeach said:

Market maker in Frankfurt is like "WTF is going on..." Already traded 3x daily average volume in the first half hour. I grabbed a few for a trade.

 

 

This is exactly where my attention also is:))

[backtothebeach]

1 hour ago, UK said:

This is exactly where my attention also is:))

Well for now it’s not getting bid up more than 1-1.5% over Friday’s close.

[UK]

46 minutes ago, backtothebeach said:

Well for now it’s not getting bid up more than 1-1.5% over Friday’s close.

 

Yep! I do not understand how this works in Frankfurt (or even if it is automated or not), but perhaps also there is not zero chance of situation changing, after these Germans finally finish drinking their coffee or when Canada trading opens:)?

 

So I am thinking, perhaps this could be a nice additional trade into this index addition OR even longer one, into 4q results (because hurricane season is over and q4 should be good for other reasons), or until FFH themselves tells us when it is over, by closing TRS (some 20-30 per cent later?).

 

Now, I am not sure how to size this extra bet, but half seriously, they trade in Frankfurt as FFX, so maybe I can open it as a second position to FFH, with a fresh new allocation limit:)))

 

Edited December 8, 2025 by UK

[Charlie]

Bought some Fairfax shares. 

[MMM20]

16 hours ago, Phoenix01 said:

This does seem like potentially a wonderful holiday gift, however, I will wait for the results before celebrating.  That said, there are some really interesting tailwinds:

1) Earning growth (~$200/Sh in 2025 + TRS based on any large price movement)

- base assumption of 15% annual growth rate

- reduced preferred dividend payment ($50M/yr) starting 2026 (+$2.5/Sh)

- reduced non-controlling dividend (was $295M in 2024).  In 2024 FFH exercised options to buy back Brit non-controlling interest (~$100M/yr in non-controlling dividends - SWAG).  

- reduced non-controlling earnings (was $450M in 2024). In 2024 FFH exercised options to buy back Brit non-controlling interest (was $137M in 2024 in non-controlling earnings).   In 2025 Recipe bought back the non-controlling interest (now 100% owned by FFH), but has negligible impact. 

- remaining options on non-controlling interests for Allied that expire in September 2026 & call options on Odyssey that expire in 2029. Allied had non-controlling interest earning of $176M in 2024 and Odyssey of 128M in 2024.

2) Multiple growth

- Forced buying - Inclusion in S&P/TSX60 (extent is tbd)

- Forced buying by FFH - Treasury purchases to fund employee share -based awards (208k shares purchased in 2024).

- Limited float - At end Q3 there were 21.3M shares outstanding.  Adjusting for 1.5M multiple-voting; 800k internal interest adjustment (the 62 company); 1.8M Treasury shares; 1.2M Shares issued as employee share based awards; 500k shares held by Prem; give an available float of ~ 15.5M Shares.  If you further reduced by the TRS (1.7M shares) this give a float of 13.8M shares.

3) Virtuous TRS feedback loop

- as the earnings grow, the "value" of the TRS appreciates (base assumption of 15% annually)

- as the multiple grows, the TRS impact on earnings & cashflow increases on top of the 15%

- In the first 9 months of 2025 the TRS produced gains of $585M.  We are down so far in Q4, but I think that might reverse by YE.  In 2024 the TRS produced gains of $1,033M and in 2023 $635M.

 

 

Thanks for posting. This looks like a good setup for +30% over the next few months, all else equal.

 

Edited December 8, 2025 by MMM20

[Junior R]

7 hours ago, backtothebeach said:

Market maker in Frankfurt is like "WTF is going on..." Already traded 3x daily average volume in the first half hour. I grabbed a few for a trade.

 

This trades on Frankfurt?

[yqsun]

1 hour ago, MMM20 said:

 

Thanks for posting. This looks like a good setup for +30% over the next few months, all else equal.

 

Agree. C$3000 is coming ......

[backtothebeach]

1 hour ago, Junior R said:

This trades on Frankfurt?

 

Yes, but very illiquid. You can drive a truck through the bid-ask spread (like 1%) and I did not get any fills inside the spread. So not really for trading - except today.

 

I already sold, too early of course, but this was a little flex on margin, which was  close to free money. Made 3000 Euros lol.

 

 

 

[UK]

35 minutes ago, Junior R said:

This trades on Frankfurt?

It does, same isin, only in EUR, as lots of other non German stocks, but usually smaller caps are very low volume, but if you make a bid, ussually market makers will get you the shares. Something like this: https://fintechnomad.medium.com/are-german-listed-vs-us-listed-stocks-the-same-1b79f8c6101a

 

If you are eur based and do not use something like IBKR, you can save on currency conversion this way, but overpay somewhat on price.

[UK]

23 minutes ago, backtothebeach said:

I already sold, too early of course, but this was a little flex on margin, which was  close to free money. Made 3000 Euros lol.

 

This was my idea as well, but I feel a little disappointed with this "nothing pop"...perhaps I will have to wait those few month or so to get to the numbers MMM20 is talking about, I would like them much better:))

 

Edited December 8, 2025 by UK

[backtothebeach]

1 hour ago, UK said:

This was my idea as well, but I feel a little disappointed with this "nothing pop"...

 

Gift horses...

[MMM20]

29 minutes ago, UK said:

to the numbers MMM20 is talking about

Take my predictions with the world’s largest grain of salt.

 

Edited December 8, 2025 by MMM20

[Thrifty3000]

Whoever it was that sold on Friday sure is wearing their “dumb face” today

[gfp]

30 minutes ago, Thrifty3000 said:

Whoever it was that sold on Friday sure is wearing their “dumb face” today

 

Wasn't me man...  One of the reasons I buy things on the way down.  Not a single order fill today

 

[Thrifty3000]

5 hours ago, gfp said:

 

Wasn't me man...  One of the reasons I buy things on the way down.  Not a single order fill today

 

Haha. @gfp I suspect your investing “dumb face” gets a whole lot less wear than mine. (Mine could use a face lift.)

[adventurer]

11 hours ago, gfp said:

 

Wasn't me man...  One of the reasons I buy things on the way down.  Not a single order fill today

 

Can`t buy "fat stacks" every day @gfp

[Hoodlum]

We had one 26k share block trade yesterday but I don't believe we have had any large index buys yet.  I think everyone was caught off guard with this and they are now discussing with larger Fairfax holders to determine what price they are willing to sell at.  It could take a few days before the volume picks up. 

 

Edited December 9, 2025 by Hoodlum

[Hamburg Investor]

16 minutes ago, Hoodlum said:

and they are now discussing with larger Fairfax holders to determine what price they are willing to sell at.  It could take a few days before the volume picks up. 

 

sorry for asking, but whom are they talking to and why? Is it that they are expecting a better price? But why should the seller at a low price from their perspective? So is it likely for them to find someone owning a. a big chunk of FFH and b. willing to sell in the moment where momentum kicks in…?!

 

That concept of selling for the latter only makes sense, if the owners don’t expect the price to go up more over the next weeks and months. And, I mean, owning a stock outside of any index defines you as an owner a relatively „independent“ investor in contrast to an institutional investor, so I’d assume less pressure to sell.
 

Where am I wrong here?