Fairfax Financial: Getting Paid To Hold Float At 7.8x Earnings

Daniel James 503 Followers Follow Summary Fairfax Financial earns a Buy rating, trading at 7.8x trailing earnings and near adjusted book value. FRFHF's insurance operations remain profitable, with a 93.1% combined ratio and $459M Q2 underwriting profit despite softening premium growth. The $77.3B investment portfolio yields ~5% from high-quality, short-duration fixed income, driving rising interest income. Reported book value understates asset value; adjusted book value suggests shares trade at only 1.09x, supporting continued share repurchases. PM Images/DigitalVision via Getty Images Introduction Fairfax Financial ( FRFHF ) isn’t especially easy to value. It combines a large insurance operation with a $77.3 billion investment portfolio, several publicly traded and privately held businesses, equity derivatives, and a long list of associate investments. Reported earnings This article was written by Daniel James 503 Followers Follow I am a part-time investor interested in equities, ETFs, macro, and emerging markets. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.