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Investing Specialists

A Few Investment Ideas from Fairfax's 13-F

Fairfax's most recent portfolio highlights several of our 5-star stocks.

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By Chris Blumas | Stock Analyst

It was a busy first quarter for the team at Hamblin Watsa Investment Counsel, the wholly owned investment management subsidiary of  Fairfax Financial (FFH), a recent addition to the Ultimate Stock-Pickers' Investment Manager Roster (which we had highlighted back in April for its relatively large purchases of U.S. equities in the fourth quarter of last year). Unlike the majority of the other insurance firms on our list, which we talked about in recent articles dedicated to  Berkshire Hathaway (BRK.A) (BRK.B),  Alleghany (Y), and  Markel (MKL), Fairfax was actively buying and selling securities during the quarter. The firm's biggest moves involved two beaten-down financial firms, which although not currently trading at prices we'd consider buying them, were deep 5-star names during the first quarter. A much closer look at Fairfax's actions sheds some additional light on how the firm continues to outpace the market and helps us produce a few more stock ideas our analysts believe are worth buying right now.

Fairfax Continues to Outperform
In a three-month period that saw the S&P 500 Index (SPX) decline by nearly 12%, Fairfax's actively managed U.S. equity portfolio declined just 7% to $2.8 billion. (Our total portfolio figures for Fairfax exclude the firm's controlling stake in  OdysseyRe (ORH), which, while worth $1.6 billion at end of the first quarter, remains a fairly static position within the portfolio and, as such, skews the composition of the firm's more actively managed investments.)

The Morningstar Ultimate Stock-Pickers Team does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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