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Fairfax Financial Holdings Ltd Shs Subord.Vtg FFH

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Stock XTSE Rating as of
CAD 1,486.20 −0.33 (0.02%)
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As of Delayed Price Closed
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Company Report

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Fairfax: Increasing Our Fair Value Estimate

Brett Horn

We are increasing our fair value estimate for Fairfax to CAD 1,180 per share from CAD 970 after reassessing the company's prospects on the investment side given recent changes in capital market conditions. Our fair value estimate equates to 1.0 times year-end 2023 book value and 1.4 times tangible book value. We still see the shares as materially overvalued from a long-term perspective. While the company is navigating the current capital market environment well, we would note that Fairfax's investment performance has been spotty over time. Although the company is riding high at the moment, its historical track record includes some substantial losses along with impressive gains.

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Price vs Fair Value

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FFH is trading at a 26% premium.
Price
CAD 1,482.00
Fair Value
CAD 2,394.00
Uncertainty
Medium
1-Star Price
CAD 5,233.00
5-Star Price
CAD 164.00
Economic Moat
Kvz
Capital Allocation
Pdnjfcwy

Bulls Say, Bears Say

Bulls

Fairfax's large gains during the financial crisis highlight the massive returns Watsa's unorthodox investing style is capable of generating.

Bears

Fairfax will continue to post poor results and could destroy significant value if Watsa's investment thesis doesn't pan out.

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Trading Information

Previous Close Price
CAD 1,486.53
Day Range
CAD 1,462.31–1,494.72
52-Week Range
CAD 910.44–1,563.49
Bid/Ask
CAD 1,484.00 / CAD 1,489.94
Market Cap
CAD 35.21 Bil
Volume/Avg
62,837 / 69,171

Key Statistics

Price/Earnings (Normalized)
7.06
Price/Sales
1.07
Dividend Yield (Trailing)
1.37%
Dividend Yield (Forward)
1.85%
Total Yield
2.76%

Company Profile

Fairfax provides reinsurance and property and casualty insurance in Canada, the United States, and other international markets. The company also has some noninsurance operations such as restaurants. Fairfax has been led by Prem Watsa, its chairman and CEO, since its formation in 1985.
Sector
Financial Services
Industry
Insurance - Property & Casualty
Stock Style Box
Large Core
Total Number of Employees
51,044
Website
https://www.fairfax.ca

Competitors

Valuation

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Metric
FFH
MKL
WRB
Price/Earnings (Normalized)
 7.0623.1415.52
Price/Book Value
 1.271.322.53
Price/Sales
 1.071.241.67
Price/Cash Flow
 —16.4515.51
Price/Earnings
FFH
MKL
WRB

Financial Strength

Metric
FFH
MKL
WRB
Quick Ratio
 ———
Current Ratio
 ———
Interest Coverage
 12.5815.3414.76
Quick Ratio
No chart available

Profitability

Metric
FFH
MKL
WRB
Return on Assets (Normalized)
 5.34%4.00%3.80%
Return on Equity (Normalized)
 23.61%15.54%19.24%
Return on Invested Capital (Normalized)
 14.30%12.11%14.67%
Return on Assets
FFH
MKL
WRB
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