watsa_is_a_randian_hero Posted May 14, 2009 Share Posted May 14, 2009 http://www.sec.gov/Archives/edgar/data/915191/000090956709000451/o55357e13fvhr.txt Link to comment Share on other sites More sharing options...
watsa_is_a_randian_hero Posted May 14, 2009 Author Share Posted May 14, 2009 Major changes: Add 3 mm shares BCE Add 700k shares of BNI Sell 3mm shares Dell Sell 3mm shares FTR Sell 6.5 mm shares Gannett Sell 2mm GE, but buy corresponding position in Calls Sell 9mm INTC Buy 6 mm ICO Sell 1 mm JNJ Sell 1mm KG Sell 1mm KFT Buy 1mm LEUCADIA Sell 700k PFE Buy 15mm USB Buy 16.5 WFC Link to comment Share on other sites More sharing options...
watsa_is_a_randian_hero Posted May 14, 2009 Author Share Posted May 14, 2009 40% of their portfolio (of what shows up filed with the SEC, which is mainly US positions), is now in 4 stocks: WFC USB JNJ DELL Link to comment Share on other sites More sharing options...
kyleholmes Posted May 14, 2009 Share Posted May 14, 2009 Great post... was waiting for this as well, out of curiosity largely. Is there anyway to find out about Fairfax's investments in Canada (ie- The Brick, etc.) or elsewhere.... I haven't heard of any way before and maybe is a stupid question, but figured I would see if anyone knew where to look. Thanks for the help, Kyle Link to comment Share on other sites More sharing options...
Zorrofan Posted May 14, 2009 Share Posted May 14, 2009 thanks for the update Watsa...always interesting to see what Prem et al are up to! cheers Zorro Link to comment Share on other sites More sharing options...
Parsad Posted May 14, 2009 Share Posted May 14, 2009 Easily by far their biggest increase was in Wells Fargo. They increased their holdings six fold from year-end. A $285M investment is now worth well over $500M. Cheers! Link to comment Share on other sites More sharing options...
Guest swf83 Posted May 15, 2009 Share Posted May 15, 2009 Any idea, roughly, where book value for FFH is currently at? Link to comment Share on other sites More sharing options...
wabuffo Posted May 15, 2009 Share Posted May 15, 2009 USB was pretty big too - they had negligible holdings prior to this Q and it looks like Watsa bought 15.8m shares (vs 16.5m shares of WFC). If he was buying during the quarter lows in early March (which Buffett also referenced as a great time to buy these two banks), he would have put about equal amounts in both US banks (probably a bit more in WFC but pretty close). wabuffo Link to comment Share on other sites More sharing options...
watsa_is_a_randian_hero Posted May 15, 2009 Author Share Posted May 15, 2009 Any idea, roughly, where book value for FFH is currently at? About $295 - $300, on an adjusted basis. This is an estimate taking their stated BV as of April 24, adding to this the difference between FV and equity value in equity investments (adjusted for tax/minority interest), and then finally calculating the value changes in their equity portfolio holdings. As a whole, the equity portfolio is slightly up since 4/24, but not too much. This estimated BV was over $300 before the S&P started declining significantly. Link to comment Share on other sites More sharing options...
NormR Posted May 15, 2009 Share Posted May 15, 2009 Anyone understand the Magna holding which is in the top 10? Link to comment Share on other sites More sharing options...
Viking Posted May 15, 2009 Share Posted May 15, 2009 watsa-is..., thanks for letting us know this was out as I also was interested in seeing the changes. I dropped the new info into my spreadsheet and to provide a slightly different take on what has already been posted. I have tried to attach the Excel spreadsheet so you can understand my comments below. - it appears FFH is not simply buying and holding all positions. I calculate they sold 13% of portfolio value in Q1, which is not a small number. They also added 23% new positions (or net 10% new positions). - regarding sectors, they sold a number of stallwarts (KFT) and Pharma (J&J, PFE) to raise cash to buy primarily two financials (WFC & USB). They also sold all of Progressive and initiated positions in USB (very large), BCE (small) and LUK (very small). - regarding changes in value (I am missing a few things like GE PUT and Preferreds? on list): FFH communicated when they released Q1 results ALL investments were up $900 million to April 24. This summary allows us to see where some of those gains were from. - it appears investment gains are tracking ahead of what FFH has comminucated. - bottom line is FFH appears to be continuing to be very opportunistic and not afraid to make big decisions with the portfolio (i.e. adding financials). - what does all this mean? With adding muni bonds in Q4 and then increasing their equity and corporate bond exposure they look well positioned to, at a minimum, maintain their long term return on average investments = 9.8%. March 31 carrying value of investments = $17.1 billion x 9.8% = $1.68 billion = $55/share (after minority interest and taxes). March 31 to April 24 = + $456 million = + 17% March 31 to May 14 = + $615 million = +23% - as was pointed out earlier, Wells Fargo is the big dog, up $144 million to April 24 and $230 million to May 14. As of May 14, WFC was worth a staggering $515 million (their share of ORH is worth about $1.7 billion)! - I also calculate current yield on stocks held is 3.5% (using March 31 prices), which is significant! 1.) sales: sold 10 positions and raised about $350 million (March 31 share price) - intel - 9,027,000 shares = - 56% (total holdings) = - $135 million (amount raised) - J&J - 808,000 shares = - 10.5% = - $43 million - Progressive - 2,881,000 shares = 100% = - $39 million - Dell - 2,685,000 shares = - 10% = - $25 million - Kraft - 1,000,000 shares = - 9% = - $22 million - Pfizer - 1,618,000 shares = - 9% = - $22 million - Frontier - 3,026,000 shares = - 16% = - $22 million 2.) purchases: bought 6 new position at cost of $606 million (March 31 share price) - Wells Fargo + 16,514,000 = + 470% = + $235 million (amount spent) - USG + 15,838,000 = new = + $231 million - BCE + 3,180,000 = new = + $63 million - Burl North + 784,000 = + 60% = + $47 million Link to comment Share on other sites More sharing options...
oldye Posted May 15, 2009 Share Posted May 15, 2009 pgr is gone after only 1 quarter :o My estimate is that the Stock portfolio MTM as of today is up roughly 500 million assuming no changes since 3/31/09 Link to comment Share on other sites More sharing options...
Viking Posted May 15, 2009 Share Posted May 15, 2009 Is it possible to get the same (or similar) report (13F) for ORH? If someone can point me in the right direction I would appreciate it! Thanks. Link to comment Share on other sites More sharing options...
Uccmal Posted May 15, 2009 Share Posted May 15, 2009 Norm, You certainly know Magna as well as I do. Conservatively, when autoparts recovers I would suggest it could be worth 120/share fairly easily. They are the most solvent of all the autoparts companies with enough cash behind them to buy up large pieces of the primary assemblers. This could get really interesting if GM or Chrysler sell off parts of their Canadian assembly operations. Link to comment Share on other sites More sharing options...
Partner24 Posted May 15, 2009 Share Posted May 15, 2009 List of FFH US holdings adjusted for their actual value (based on end of March holdings): http://holdings.nasdaq.com/asp/OwnerPortfolio.asp?FormType=OwnerPortfolio&CIK=0000915191&HolderName=FAIRFAX+FINANCIAL+HOLDINGS+LTD%2F+CAN So, our US stocks portfolio is probably worth more than FFH market cap. Link to comment Share on other sites More sharing options...
watsa_is_a_randian_hero Posted May 15, 2009 Author Share Posted May 15, 2009 Thats if you count ORH. By counting ORH you are double-counting. ORH gets its value from the investments it holds, and because FFH controls ORH, those investments show up here. Link to comment Share on other sites More sharing options...
watsa_is_a_randian_hero Posted May 15, 2009 Author Share Posted May 15, 2009 watsa-is..., thanks for letting us know this was out as I also was interested in seeing the changes. I dropped the new info into my spreadsheet and to provide a slightly different take on what has already been posted. I have tried to attach the Excel spreadsheet so you can understand my comments below. - it appears FFH is not simply buying and holding all positions. I calculate they sold 13% of portfolio value in Q1, which is not a small number. They also added 23% new positions (or net 10% new positions). I think what is most surprising to me is to see partial sales of KFT & JNJ after he said in this years AR that those are two positions he would contemplate holding for the long term. He said the same thing about WFC - makes me wonder if he has done partial sales on that position too now that the value of the position is over $500mm. Link to comment Share on other sites More sharing options...
Partner24 Posted May 15, 2009 Share Posted May 15, 2009 You're right watsa is a randian hero. If you exclude ORH from the equation, based on Nasdaq data, you get an approximately 3,3 billions stock portfolio, or approximately 70% of FFH market cap. Link to comment Share on other sites More sharing options...
Myth465 Posted May 15, 2009 Share Posted May 15, 2009 It seems like a decent way to play Wells and UBS is to buy FFH. They have doubled and it hasnt moved much at all. Link to comment Share on other sites More sharing options...
watsa_is_a_randian_hero Posted May 15, 2009 Author Share Posted May 15, 2009 My calcs show $3.7 billion in equities. That doesn't include what they might own in asia, europe, south america Link to comment Share on other sites More sharing options...
Partner24 Posted May 15, 2009 Share Posted May 15, 2009 Yes, as stated before, the Nasdaq holdings show what is listed in US only, so we don't have all the picture here. Link to comment Share on other sites More sharing options...
Parsad Posted May 15, 2009 Share Posted May 15, 2009 I think what is most surprising to me is to see partial sales of KFT & JNJ after he said in this years AR that those are two positions he would contemplate holding for the long term. He said the same thing about WFC - makes me wonder if he has done partial sales on that position too now that the value of the position is over $500mm. When you can buy a business like WFC at 4-5 times earnings or hold KFT & JNJ at 12-14 times earnings, the right thing to do is lower the market risk to the portfolio by buying the cheaper investment. That doesn't mean you wouldn't hold any of them forever, but you are weighing price against intrinsic value. I'm sure they've taken a little bit of profit from WFC. The only reason Buffett doesn't sell much is because he has to instill this culture of keeping businesses forever. Otherwise, people would never sell their life's work to him. He also has to create a type of business that will run completely smoothly without him being at the helm, thus you want a system that is easy to replicate for the new management. Cheers! Link to comment Share on other sites More sharing options...
Uccmal Posted May 15, 2009 Share Posted May 15, 2009 I am betting they have unloaded a portion of WFC, or possibly all, since the latest filing. Unlike Buffett FFH can unload their holding in a day or two without dropping the price. There is absolutely no reason for FFH to sit on those gains. We may be very surprised at Q end when we are told that there are a few hundred million in realized gains. Link to comment Share on other sites More sharing options...
oldye Posted May 15, 2009 Share Posted May 15, 2009 Assuming 4$ a share in normalized earnings, FFH's lookthru earnings on the Wells position alone 80 million! Why sell 80 million dollars in earnings for a mere 500 million when they can afford to wait? It would take roughly 2 billion dollars worth of treasuries to generate the same amount of earnings power, even more if you consider taxes! Link to comment Share on other sites More sharing options...
watsa_is_a_randian_hero Posted May 15, 2009 Author Share Posted May 15, 2009 Assuming 4$ a share in normalized earnings, FFH's lookthru earnings on the Wells position alone 80 million! Why sell 80 million dollars in earnings for a mere 500 million when they can afford to wait? It would take roughly 2 billion dollars worth of treasuries to generate the same amount of earnings power, even more if you consider taxes! How do you get to $4 per share normalized earnings. Maybe by 2012. Link to comment Share on other sites More sharing options...
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