No. of Recommendations: 6
The Fairfax U.S. pink sheet listing closed above $1,200 per share for the first times Thursday and Friday, finishing the week at $1,205 on massive volume of 394 shares traded. It closed below $1,100 as recently as Aug. 12, so it's been on a nice little run, coinciding with a run by other financials, including Berkshire. Nice to see Fairfax participating.
It also appears Mr. Market is slowly rerating the shares based on accelerating value creation. Six months ago, when it reported full-year 2023 results, the price was $1,041.52 and book value per share was $939.65, for a price-to-book ratio of 1.1x.
Today, with the price at 1,205 and Q2 book value per share of 979.63, price-to-book is 1.23x. Of course it can always regress again with the market, but it does seem as if investors are recognizing improving performance.
Book value increased by 6% over the six month period, adjusting for the $15-per-share dividend paid in January.
Since Feb. 8, when the shares closed at $920.37 following publication of the short report by Muddy Waters, the stock is up 31%. Once again, thanks to DTB and Nola for refuting the Muddy Waters report in real time. I was able to pick up some shares that day at $914 because of their willingness to contribute their expertise on these boards.
According to perplexity.ai, which is better than me at math, double-digit annualized growth in book value now goes back 10 years:
Fairfax's Book Value Per Share Growth
Fairfax Financial Holdings has demonstrated strong book value per share growth over various time periods:
12-month average growth rate: 16.90% per year
3-year average growth rate: 27.00% per year
5-year average growth rate: 17.20% per year
10-year average growth rate: 10.50% per year
Perplexity recently made a math mistake that even I caught, so I don't vouch for these numbers. As with AI generally, the best I can say is it could be right.
