Fairfax Financial Holdings Ltd T.FFH.PR.I

Another Assessment

[retiredcf]

Pretty much agrees with Tidefall's Trevor Scott. GLTA

It is a bizarre pick for Muddy Waters (MW), in that it is fairly large, is VERY cheap (5X earnings, cheap also compared to book value) and the short position is actually very small (0.7% in Canada, 0.42% in the US). Also MW says it is worth 18% less than market price, which is not really an aggressive short target. The stock can see that type of drawdown in any bad market anyway. MW goes through various acquisitions of FFH and picks each apart for various reasons, some valid, some less so. FFH is not perfect. But it usually (not every year) generates substantial cash flow, and cash cannot be easily managed or 'manipulated'. It has a strong record of dividends. It has a very strong record of profitability. As a 'deal maker' and a value investor, not all of its buys are going to work. Its insurance operations do have variability. But, all of this is reflected in its very low valution. FFH has already responded, with, essentially, 'whatever. We're good. We have record earnings and investors can ask questions next week on our quarterly conference call'. We like this response. It plans on letting the numbers do the talking. The short report is 72 pages long so we some more time on all of it, but nothing we see really looks to concerning to us, for a company that has a pretty solid long term history of growth and cash flow. We would be fine accumulating a bit into today's panic. (5iResearch)

[rad10]

Earnings going to destroy this position.  Book value is debatable.  Earnings don't lie.  This stock is dirt cheap. Bought too early yesterday, but will laughing in a couple of weeks. MW are picking up nickels in front of a steam roller.   Going short is fine, but parading your short and heralding it from the rooftops on a stock that is in blackout and widely held by

[retiredcf]

I''m also very surprised that the SP is in the red at all today after this short has proven to be extremely misplaced. On the plus side, it did allow me to add more at the open. Expect a stronger finish as we head into the close. Tremendous long term bargain at this price. GLTA

[Mephistopheles3]

Agreed - I like CIBC's take on it where they pretty much stated that if the book value was inflated, that means RoE is even better which means higher price target!   I've been eyeing FFH for a little while now and always regretted not jumping in as it's been climbing.  So good entry point to gradually pick up some shares here and there. 

[Th3St0ckJ0ck]

Conspiracy theory:  These guys took a short position, it is underwater, they know earnings is coming next week and will crush them so released a rather weak short report to try and mitigate loss before getting blown out entirely.  It is unfortunate that the market gave them 11% yesterday on panic.  It took all of 45 seconds to look at market cap for a publicaly traded company to see