Fairfax Financial: A Global Property & Casualty Insurance Company

Jeff Stacey presented his in-depth investment thesis on Fairfax Financial (Toronto: FFH) at Wide-Moat Investing Summit 2015.

Fairfax Financial is a global property & casualty insurance company whose corporate objective is to build shareholder value by achieving a high rate of compound growth in book value per share over the long term. Since the company started in 1985, book value per share has grown at an annual compounded growth rate of 21.1%. The company had net premiums written of $6.3 billion in its most recent fiscal year and achieved a combined ratio of 90.8%. with underwriting profits of $552 million. The company is controlled by V. Prem Watsa and he and his investment team have an excellent long term investment track record managing the insurance company investment portfolios which totalled $26.2 billion at year end. The company has made an offer to purchase Brit PLC and recently formed Fairfax India Holdings Corporation with over $1 billion in capital to invest in India. With Fairfax shares currently trading at approximately 1.25 times book value per share and at only 7 times its 2014 earnings, we believe the share price is undervalued.

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About the instructor:

Jeffrey Stacey is the Founding Partner of Stacey Muirhead Capital Management. In addition to sharing responsibility for the overall direction of the firm, Jeff has acted as Portfolio Manager for the Stacey Muirhead Limited Partnership and the Stacey Muirhead RSP Fund since their inception. He is also responsible for client service efforts at the firm. Jeff has over 25 years of investment industry experience. Prior to starting Stacey Muirhead Capital Management, he was employed with a boutique Toronto investment firm where he was also a shareholder. Jeff has an Honours Bachelor of Business Administration degree from Wilfrid Laurier University and is a Chartered Financial Analyst. He is a member of the Finance and Investment Committee at the University of Waterloo and is a member of the Dean’s Advisory Council at the Wilfrid Laurier University School of Business and Economics. Additionally, Jeff currently serves on the Board of Trustees at Parkminster United Church. He is a former director of Rainmaker Entertainment Inc. and previously served on the Board of Trustees and Investment Management Committee at the University of Guelph.

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