Santayana Posted January 15 Posted January 15 11 minutes ago, Hoodlum said: Is it not based on settlement date? I thought you would need to purchase before today to ensure it gets settled today. That's why I said if you held at the open, purchasing today would be too late.
Santayana Posted January 15 Posted January 15 @gfp's point is true regardless, it seems the stock is trading up on the ex-date!
Hoodlum Posted January 15 Posted January 15 (edited) 6 minutes ago, Santayana said: @gfp's point is true regardless, it seems the stock is trading up on the ex-date! I have seen this happen in the past with Fairfax. There seems to be volume sellers leading up to the ex-dividend date, but then the selling pressure/volume drops ex-dividend. I personally don’t understand the rational but have used it in the past and this year to add the annual contribution to my registered accounts to take advantage of this. Edited January 15 by Hoodlum
Txvestor Posted January 15 Posted January 15 21 minutes ago, Hoodlum said: I have seen this happen in the past with Fairfax. There seems to be volume sellers leading up to the ex-dividend date, but then the selling pressure/volume drops ex-dividend. I personally don’t understand the rational but have used it in the past and this year to add the annual contribution to my registered accounts to take advantage of this. I joined you this year, as I think Q4 2025 results will be especially strong in a couple of weeks time. So, when I saw it pull back 6% with a 0.8% dividend pending, it was too tempting. Of course no guarantees as the market can behave irrationally at times, but I'm thinking it breaks to new highs after the results. I just can't find anything else which gives me such a clear path to 15+% ROE for atleast the next 3yrs. So I'm more than happy to be "trapped" in it as well.
dartmonkey Posted January 15 Posted January 15 (edited) 3 hours ago, Hoodlum said: I have seen this happen in the past with Fairfax. There seems to be volume sellers leading up to the ex-dividend date, but then the selling pressure/volume drops ex-dividend. I personally don’t understand the rational but have used it in the past and this year to add the annual contribution to my registered accounts to take advantage of this. This is one possibility. The other possibility is that it is just almost random fluctuation of the share price. The day to day average move in the last year is a surprisingly high 1.0% (I calculated the FFH $C price), and the dividend is about 1% too. So while you would normally expected a 1% drop in the share price on the day after the dividend, a 0% change or a 2% drop would both be completely unsurprising, just because the stock tends to move around so much. I also looked at the share price change from the close, the day before going ex-div compared to the day of going ex-div. The share price change was roughly as you would expect, with a share price drop about the same as the amount of the dividend. You would have made a bit more in 2024 or 2025, but if you take the average of the last 10 years, you would have made an average of $1.32 every year by buying the day before going ex-dividend, or less if you paid taxes. Edited January 15 by dartmonkey
valueinvesting101 Posted January 15 Posted January 15 (edited) On 1/8/2026 at 3:57 PM, Viking said: I got lazy in my prior post; I meant 'owned/controlled'. I used what was reported in Fairfax's Proxy Report. Below are updated numbers/estimates. My guess is effective shares outstanding will be around 21 million at YE. How to think about shares reserved in treasury for share-based payment awards? As per last annual report there were 1,967,008 (~10%) of the outstanding. Are these shares already accounted for previously promised compensation to be issued in future or is it a reserve for paying part of the future compensation? If it is for paying future compensation, does that mean Fairfax will have lower expenses in future if stock price is higher? So if Fairfax needs to pay compensation of $1800 they will issue one share but if stock price is $3600 then they only need to issue 0.5 share. Edited January 15 by valueinvesting101 clarity
SafetyinNumbers Posted January 15 Posted January 15 8 minutes ago, valueinvesting101 said: How to think about shares reserved in treasury for share-based payment awards? As per last annual report there were 1,967,008 (~10%) of the outstanding. Are these shares already accounted for previously promised compensation to be issued in future or is it a reserve for paying part of the future compensation? If it is for paying future compensation, does that mean Fairfax will have lower expenses in future if stock price is higher? So if Fairfax needs to pay compensation of $1800 they will issue one share but if stock price is $3600 then they only need to issue 0.5 share. I think the expense runs through in the period when the shares are provided to the employees. They buy the shares ahead of time so that the cost doesn’t end up being higher when they vest presumably. It’s one of the more unique and shareholder friendly SBC plans I have seen.
valueinvesting101 Posted January 16 Posted January 16 Quote From 2024 AR Treasury shares and share-based payment awards Treasury shares and share-based payment awards During 2024 the company acquired for treasury 207,974 subordinate voting shares at a cost of $240.4 (2023 – 110,528 subordinate voting shares at a cost of $89.6) for use in its share-based payment awards. Additionally, during 2024 the company reissued 220,145 subordinate voting shares from treasury, which were previously acquired at a cost of $108.3, in settlement of vested share-based payment awards (2023 – reissued 153,194 subordinate voting shares from treasury previously acquired at a cost of $74.2). Share-based payment awards comprise a portion of the company’s annual bonus to its senior employees at the holding company and at the insurance and reinsurance operating companies. All of the company’s share-based payment awards of Fairfax subordinate voting shares are accounted for as equity settled plans and generally vest over a five-year service period. The fair value of share-based payment awards on the grant date is amortized to compensation expense over the vesting period, with a corresponding increase to the share-based payments equity reserve in common shareholders’ equity. During 2024 compensation expense of $164.9 (2023 – $147.0) related to share-based payment awards was recorded in the consolidated statement of earnings. I agree this arrangement is unique and one of the most shareholder friendly SBC plan. I am wondering if this mechanism of buying shares in treasury when prices are low and then issues few years later when prices are high creates value for the shareholder or does that the benefit of increasing prices flows to employee for bonus issued but not vested. Based on above disclosure compensation expense for 2024 was $164.9 for shares issued in 2024 but these issued shares had cost basis of $108.3. I guess that benefits flows to the Fairfax equity account.
TwoCitiesCapital Posted January 16 Posted January 16 (edited) 20 minutes ago, Haryana said: How would it be shareholder friendly if that benefit was flowing to the employees? It's an arrangement that makes the comp cost knowable upfront and neutralizes the effect of the issuance. Instead of granting it, and buying back years later when much higher, it's bought back today and granted. Shareholders collect the difference of buying today vs years from now AND the certainty of the SBC instead of having to guess at it. Whether the shares are bought today, or 3 years from now, matters not to the employee who gets the same number of shares or the same % of their comp in shares. It matters a lot to the shareholders. Edited January 16 by TwoCitiesCapital
dartmonkey Posted January 16 Posted January 16 10 hours ago, TwoCitiesCapital said: Whether the shares are bought today, or 3 years from now, matters not to the employee who gets the same number of shares or the same % of their comp in shares. It matters a lot to the shareholders. Yes, it’s another form of share repurchase by Fairfax, when its shares are cheap. In addition to the shares it repurchases with the intention of retiring them, it also purchases the shares it will need to hand over to employees in a few years.
Phoenix01 Posted January 16 Posted January 16 Here is table that shows FFH treasury purchases and Issuances over the past 6 years. FFH does has not disclosed the cost of the shares issued before 2023.
cwericb Posted January 16 Posted January 16 Anyone have an idea for a one day drop of over $100? FFH −$133.83 (5.21%) $2,436.42 Pretty nasty one day drop. Brett Horn at work?
value_hunter Posted January 16 Posted January 16 59 minutes ago, cwericb said: Anyone have an idea for a one day drop of over $100? FFH −$133.83 (5.21%) $2,436.42 Pretty nasty one day drop. Brett Horn at work? We have some discussion here: https://thecobf.com/forum/topic/16427-fairfax-stock-positions/page/126/#comments
cwericb Posted January 16 Posted January 16 35 minutes ago, value_hunter said: We have some discussion here: https://thecobf.com/forum/topic/16427-fairfax-stock-positions/page/126/#comments Yeah, just thought the subject was more related to this thread/topic.
SafetyinNumbers Posted January 17 Posted January 17 5 hours ago, cwericb said: Anyone have an idea for a one day drop of over $100? FFH −$133.83 (5.21%) $2,436.42 Pretty nasty one day drop. Brett Horn at work? I’m guessing that there was a mandate change on a portfolio. There were some other big moves in other TSX stocks that didn’t have any news flow from what I can tell. Pure speculation but it makes the most sense to me.
djokovic1 Posted January 19 Posted January 19 Zurich re just made an offer for Beazley (UK P&C insurer) at a 56% premium. I had been looking at Beazley as it has been performing well but as most stocks in the UK was trading at a distressed price. It would have actually been nice if Fairfax made a bid for it, as it has £11bn of float and even with the 56% premium included trades at ~£7bn market cap. (although to do that size of an acquisition, Fairfax would likely have to issue shares, which I am not a fan of at this valuation).
djokovic1 Posted January 19 Posted January 19 (edited) Yes not exactly cheap, but Beazley's track record is very good. So would have fit with paying fair prices for a high quality asset eg. Gulf insurance. More importantly, I like to look at it from the perspective of how much are you paying and how much float are you getting in return. For Fairfax especially, the float is super valuable given their investment prowess and investment leverage. But in anycase the board has rejected the bid (for now) Edited January 19 by djokovic1
Hoodlum Posted January 19 Posted January 19 FFH this morning dropped to prices not seen since before index inclusion announcement.
SafetyinNumbers Posted January 19 Posted January 19 45 minutes ago, djokovic1 said: Yes not exactly cheap, but Beazley's track record is very good. So would have fit with paying fair prices for a high quality asset eg. Gulf insurance. More importantly, I like to look at it from the perspective of how much are you paying and how much float are you getting in return. For Fairfax especially, the float is super valuable given their investment prowess and investment leverage. But in anycase the board has rejected the bid (for now) They likely buy in Allied World and Odyssey minority interests before buying another large insurance acquisition.
yqsun Posted January 19 Posted January 19 On 1/16/2026 at 10:10 PM, SafetyinNumbers said: I’m guessing that there was a mandate change on a portfolio. There were some other big moves in other TSX stocks that didn’t have any news flow from what I can tell. Pure speculation but it makes the most sense to me. That sounds right — about 50K shares traded early in the session today.
dartmonkey Posted January 19 Posted January 19 37 minutes ago, Hoodlum said: FFH this morning dropped to prices not seen since before index inclusion announcement. Announcement of TSX 60 inclusion: Friday Dec 5 after market close, closing price was US$1679, and it was was $1758.79 at Friday's close, with US markets closed today. In C$, FFH was $2321.37 on Dec 5, closed last Friday at $2436.42, and is down to about $2413 right now. So the price is still about C$100 higher than before the announcement, and the share price was a bit lower than today's price during the first trading day after the announcement (it was between C$2390.50 and $2439.60 on Monday Dec 8, as the market took a day or so to digest the information). But it is quite true that, apart from that first trading day after the announcement, the price has not been so low. My bold predicition is that today's price will turn out to be the lowest of the year. Oh, to not already have a 46% stake - but maybe another 2-3% would be a good idea...
djokovic1 Posted January 19 Posted January 19 Yeah agree, this random price move doesn't make any sense. All we can do is thank Mr. Market for the opportunity to add and wait.
SafetyinNumbers Posted January 19 Posted January 19 1 hour ago, yqsun said: That sounds right — about 50K shares traded early in the session today. That cross was from Questrade. I’m not sure what it means to be honest. My guess is an international broker using them for direct market access.
TwoCitiesCapital Posted January 19 Posted January 19 2 hours ago, Hoodlum said: FFH this morning dropped to prices not seen since before index inclusion announcement. Buy the rumor - sell the news. Anyone arbitraging index flows and dividends is probably getting out. All those who wanted in are already in. Temporary supply/demand mismatch. I imagine it'll fix itself after Q4 earnings are announced
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