Prem Watsa

Prem Watsa

Last Update: 2014-11-14

Number of Stocks: 43
Number of New Stocks: 4

Total Value: $1,479 Mil
Q/Q Turnover: 14%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Prem Watsa Watch

  • Guru Stocks at 52-Week Lows: IBM, BBL, DCM, EC, MFG

    According to GuruFocus list of 52-week lows, these Guru stocks have reached their 52-week lows.


    International Business Machines Corp (IBM) reached the 52-week low of $161.76

      


  • David Dreman Purchases 62 New Holdings in Q3

    David Dreman (Trades, Portfolio) founded Dreman Value Management in 1977, a contrarian value investing firm. During the third quarter, Dreman purchased 62 new stocks and added to the fund’s position in 42 more. He also divested 79 stocks and reduced the position in 36 holdings.


    Dreman, a pioneer in behavioral finance, is the author of five books, the most recent of which is Contrarian Investment Strategies: The Psychological Edge. In addition, he has been a senior columnist at Forbes for more than 30 years, where his column is called The Contrarian.

      


  • Guru Stocks at 52-Week Lows: IBM, BBL, SAN, ABEV, RIO

    According to GuruFocus list of 52-week lows, these Guru stocks have reached their 52-week lows.


    International Business Machines Corp (IBM) reached the 52-week low of $164.16

      


  • Prem Watsa Buys IBM, Bally Technologies, Rayonier Advanced Materials, Sells Idenix Pharmaceuticals, Questcor Pharmaceuticals, Susser Holdings

    Prem Watsa (Trades, Portfolio) Buys IBM, Bally Technologies, Rayonier Advanced Materials, Sells Idenix Pharmaceuticals, Questcor Pharmaceuticals, Susser Holdings

    Prem Watsa (Trades, Portfolio) of Fairfax Financial (TSX:FFH) just reported his third quarter portfolio. Prem Watsa (Trades, Portfolio) bought Fairfax for less than $10 million and has built it into a insurance giant with annual revenue of more than $10 billion. His investment idols are Ben Graham and Sir John Templeton.  


  • Fairfax Financial Earning Call Opening Statements

    Fairfax Financial (FRFHF) Had its third quarter earnings call on Oct. 31, 2014.


    Transcript of earnings call opening statements

      


  • Fairfax Financial's Third Quarter Earnings

    Fairfax Financial Holdings (FFH) (FRFHF) released its third quarter earnings on Oct. 30. The firm had earnings of $461.2 million of $20.68 per share after payment of preferred dividends. This reflects an increase in investment gains and improvements in underwriting. Compared to the net loss of $571.7 million in the third quarter of 2013, or $29.02 net loss after payment of preferred dividends. Fairfax's book value increased in the third quarter to $403.76 per share compared to Dec. 2013 of $339.00, a 22.1% adjusted increase for the $10 dividend paid in the first quarter of 2014.


      


  • 'Canada's Warren Buffett' Inspires Confidence in Investors


    “Pray as though everything depended on God. Work as though everything depended on you.” – St. Augustine (354-430)

      


  • An Interview With Fairfax Financial's Prem Watsa

    Please briefly describe your family background.


    My father was an orphan from Mangalore. He lost his mother when he was 3 , and then his grandfather when he was 12 . He was one of four children, so his other siblings were sent to live with various relatives. However, he went to school and was an active sportsman, did his Bachelor’s degree and became a teacher at Madras Christian College. He later, went on to become the Principal of Hyderabad Public School.

      


  • Fairfax Financial: Assurance in Insurance

    Fairfax Financial (TSX:FFH) is a world-class insurance holding company that is a long-term compounding machine and worth significantly more than its current trading price. The security also provides significant protection against any downturn in the market, given the company’s positioning of its investment portfolio. The company’s quarter-end book value was $387 USD per share at June 30, 2014. There are approximately $45 per share in mark-to-market adjustments that can be added to this, resulting in an adjusted book value of $432 US per share. At its current quote ($445), one can purchase the company for 1.05x book value. The company is easily worth 1.3-1.4x book value, and that value will continue to increase. A more reasonable valuation is $600 per share.


      


  • Prem Watsa's Top Five Holdings

    Prem Watsa (Trades, Portfolio) founded the Toronto-based Fairfax Financial Holdings Limited (TSX:FFH) in 1985, which is engaged in property and casualty insurance, as well as reinsurance and investment management. Watsa was born in India, originally trained as a chemical engineer but took a chance to move to London, Ontario, where his brother lived. There, Watsa earned an MBA at Western University and then worked for a decade in the investment department at a now defunct Canadian insurance company before forming Fairfax. Today, Fairfax manages about $1.46 billion in assets.


    In GuruFocus’ 2011 interview with Watsa, the investor cited John Templeton, the renowned value-oriented contrarian investor, as his mentor. While Watsa tends to be neutral rather than investing long or short, he said the most valuable lesson he learned from Templeton was to be flexible. Since then, he has often been referred to as the “Canadian Warren Buffett (Trades, Portfolio).” While there are certainly similarities between the two — both made their fortunes in insurance and draw relatively modest salaries — Buffett tends to avoid risk and companies in trouble, unlike Watsa. The investor is known for a contrarian style and often invests in distressed stocks, most recently exemplified by his decision to take a large stake in Blackberry Ltd. (BBRY), formerly known as Research in Motion.

      


  • Prem Watsa Buys 4 New Stocks

    Prem Watsa (Trades, Portfolio), founder of Canadian insurance conglomerate Fairfax Financial Holdings (TSX:FFH), has been fully hedged on his equity positions since about 2010, reducing his returns as the market increased. In Fairfax’s second quarter financial results, however, Watsa told investors the hedges had decreased, though they were prone to fluctuate:  


  • Prem Watsa Takes 3 New Small Holdings

    Prem Watsa (Trades, Portfolio) is a cautious investor, whose vigilance has been heighted in recent years by what he perceives as a mix of factors indicating an economic storm up ahead. He has had extraordinary performance at his insurance conglomerate Fairfax Financial (TSX:FFH), compounding book value per share at 21.3% since inception. His return on his stock portfolio has lagged, however, as he hedges against potential future market instability. According to his 2013 annual letter, threats he sees to the market include: high U.S. total debt/GDP ratio with significant deleveraging remaining, weak economic growth in the Western world, inflation, QE’s lack of impact on the real economy, real estate bubble in China and low U.S. and junk bond yields.

    In the first quarter, Watsa started three new positions, in Steel Partner Holdings LP (SPLP), Morgan Stanley Asia Pacific Fund Inc. (APF) and Harvest Natural Resources Inc. (HNR).  


  • Prem Watsa 2014 Fairfax Annual Meeting Slides



  • Prem Watsa, Wilbur Ross Invest Almost Half a Billion in Greece's Eurobank

    After a profitable investment in Bank of Ireland (IRE), Prem Watsa (Trades, Portfolio) and Wilbur Ross (Trades, Portfolio) have joined forces to lead a cash infusion into another of Europe’s stricken financial institutions, Eurobank Ergasias S.A. (FRA:EFGC)(ATH:EUROB). The two investors are coming to the bank’s aid as it raises money to meet new recapitalization requirements set by the Greek Parliament, effective March 30.


    Watsa’s firm Fairfax Financial Holdings Limited (TSX:FFH) has committed €400 million to a stock issue the bank is holding, pricing shares at €0.30 each. It is the second largest amount in a group of five investors who are collectively committing €1.32 billion in the offering, including Wilbur Ross (Trades, Portfolio), whose WLR Funds is purchasing €37.5 million in shares. Together, the group is contributing 46.5% of the bank’s capital increase. Fairfax and WLR Funds agreed to a six-month lock-up period following the offering.

      


  • Analysis of Guru Companies - Prem Watsa, Fairfax Financial

    Of the investing gurus we follow at GuruFocus.com, six have publicly traded companies that are directly affected by their investments. So far I discussed Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway (BRK.A)(BRK.B), Carl Icahn (Trades, Portfolio)’s Icahn Enterprises (IEP), and Ian Cumming (Trades, Portfolio)’s Leucadia National (LUK). The next stock I am discussing is Prem Watsa (Trades, Portfolio)’s Fairfax Financial (FFH:TSX, FRFHF).


    The Guru

      


  • Why BlackBerry Is Sweeter Than Apple

    With software bugs, system breakdowns and tardy upgrades, BlackBerry (BBRY) had been rotten to the core for five long years due to managerial arrogance, incompetence and plain laziness. Once the sweet juice turned sour, it had burned too many stomachs and broken too many souls on Wall Street. The lingering bad taste is so widespread that people failed to see a new BlackBerry, sprouting out from their solid security roots, led by strong and proven leadership, charging into new growth areas with moats and recurring revenue, poised for long-term growth, while still in the first-inning of a historic turnaround.


      


  • Prem Watsa Is Fully Hedged

    Prem Watsa (Trades, Portfolio) is often described as “Canada’s Warren Buffett (Trades, Portfolio).” He said in his letter to Fairfax Financial (TSX:FFH) shareholders released on March 7 that his common stock portfolio is fully hedged. He then highlighted some of his reasons for being bearish:


    1. The U.S. total debt/GDP ratio is at a very high level and significant deleveraging is yet to come. This applies to Europe and the UK also.

      


  • Prem Watsa Cuts One of His ‘Most Successful Investments’

    Prem Watsa (Trades, Portfolio), the Canadian investor who owns Fairfax Financial Holdings (TSX:FFH), back in 2011 formed a consortium with Wilbur Ross (Trades, Portfolio) and several other financiers to infuse cash into the struggling Bank of Ireland (IRE) – an investment which turned out to be one of his “most successful,” as he said in his recently released 2013 annual letter to shareholders. Like Warren Buffett (Trades, Portfolio) at Berkshire Hathaway (BRK.A)(BRK.B), Watsa invests the float of his insurance conglomerate. Also like Buffett, he has rapidly increased the book value of Fairfax, registering a 21.3% compound annual growth rate in intrinsic value since 1985, according to his 2013 letter.

    For the past several years, Watsa’s returns on his common stock portfolio have been more muted than his historical numbers, due to a 100% hedge he has placed out of concern for the economic consequences of fiscal and monetary stimulus in the U.S., which he believes has yet to play out. Individual investments, however, have exceeded previous success in some cases, such as the strategy he devised with Bank of Ireland (LSE:BKIR).  


  • Prem Watsa Comments on Selling MEGA Brands

    It is with some sadness that we say farewell to MEGA Brands (TSX:MB), a leading global toy company run by the Bertrand family in Montreal, Canada. It is a made-in-Quebec success story that we assisted through the tough recessionary years. The Bertrands approached us with the request to sell to Mattel and as we have said in the past, we support management and the founders. Our cost for our MEGA shares is Cdn$9.88 per share and the Mattel offer is at Cdn$17.75 per share. All in, including our loss on our original convertible debentures, our profit will be Cdn$17 million.

    From Prem Watsa (Trades, Portfolio)'s annual 2013 letter to shareholders.  


  • Prem Watsa Comments on Bank of Ireland

    It is amazing to witness the transformation that has taken place in Ireland. In 2011, when we made our investment in the Bank of Ireland (IRE) at 10 euro cents per share, 10-year Government of Ireland rates were 12%, housing prices had come down 40% and sentiment was bleak. Since then, 10-year Government of Ireland rates have dropped to 3.1%, house prices have bottomed out and have begun to rise, Ireland has access to the bond markets again and capital is flooding into Ireland! Under Richie Boucher's strong leadership, the Bank of Ireland continues to do well as it recently refinanced its government-owned A1.8 billion preferred by doing a A580 million equity issue at 26 euro cents per share and selling the rest into the marketplace. Also, it adid a A750 million unsecured five-year bond financing at 3.34%! The Irish Government has now had all its loans to the Bank of Ireland paid back and its 13.95% ownership of the common stock is in a sizeable profit position. We thank the Irish Government for its exceptional support of the Bank of Ireland and look forward to the Bank's continued progress under Richie's leadership.


    As this letter went to print, because of the significant appreciation in our position in the Bank of Ireland, we rebalanced that position by selling a third of it at approximately 33 euro cents per share. The Bank of Ireland has been one of our most successful investments because of the outstanding performance of Richie and his management team. We continue to be strong supporters of Richie and the Bank of Ireland.

      


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