Prem Watsa

Prem Watsa

Last Update: 05-13-2016

Number of Stocks: 29
Number of New Stocks: 6

Total Value: $1,126 Mil
Q/Q Turnover: 2%

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

Prem Watsa Watch

  • BlackBerry May Have Finally Turned the Corner

    I start this note with a quote from the English economist A.C. Pigou: "The error of optimism dies in the crisis, but in dying it gives birth to an error of pessimism. This new error is born, not an infant, but a giant."

    Blackberry logo


  • Ray Dalio Sells Viacom and Exelon, Trims Apple and Pepsi

    Ray Dalio (Trades, Portfolio) founded Greenwich, Connecticut-based hedge fund Bridgewater Associates in 1975. Now it has more than $165 billion under management. During the first quarter he sold shares in the following stocks:

    The guru closed his stake in BCE Inc. (BCE) with an impact of -0.39% on the portfolio.


  • High Dividend Yield Companies Attract Gurus

    The All-in-One Screener listed Hewlett-Packard Co. (NYSE:HPQ) and International Business Machines Corp. (NYSE:IBM) as two high dividend yield computer hardware stocks. Due to these high dividend yields, many gurus have very large positions in these stocks.

    Screening for big dividends


  • Prem Watsa, Who Fears Once-in-a-Century Financial Storm, Buys 7 New Stocks

    Prem Watsa (Trades, Portfolio) has hedged his portfolio for several years, which has muted his returns but protected his investors from the possibility of a once-in-a-century economic disaster.

    From 2011 to 2015, Watsa’s Fairfax Financial Holdings (TSX:FFH), an insurance conglomerate and investment vehicle styled like Buffett’s Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B), had an average total return on investments of 3%, its lowest period to date because of hedges. Since its founding, Fairfax’s book value increased at a compounded rate of 20.4% and its stock at 19.4% per year.


  • Helmerich & Payne, MasterCard Have Growing Dividend Yields

    Thanks to GuruFocus’ All-in-One Screener, I want to highlight stocks that have a growing dividend yield with sustainable payout ratio. This sustainability is confirmed by long-term company profitability and a very strong financial situation.

    Helmerich & Payne Inc. (HP) has a dividend yield that has grown by 81% over the past five years. The yield is now 4.81% with a payout ratio of 127%. The average ROA of the last five years has been 10.84% and the average ROE during the period was 15.8%.


  • The Art of Piggybacking

    Piggybacking has been a topic that has been discussed frequently these days. Fellow writer the Science of Hitting’s recent article is quite illuminating and definitely worth reading. Inspired by him, I wrote this article to share my observations and thoughts on this subject.

    When I first started investing, I piggybacked many gurus and very frequently. I remember the days when I saw David Einhorn (Trades, Portfolio) or Mason Hawkins (Trades, Portfolio) initiating a position in a stock, and within a few hours I became an owner that the same stock. When I saw Exco (NYSE:XCO) was bought by Prem Watsa (Trades, Portfolio), Howard Marks (Trades, Portfolio) and Wilbur Ross (Trades, Portfolio), I put a good amount of money in it without even finishing up reading the 10-K.


  • Prem Watsa Buys 8 Million Shares of Exco Resources

    Guru Prem Watsa (Trades, Portfolio) added 8 million shares of Exco Resources Inc. (NYSE:XCO) to his portfolio in the fourth quarter.

    Exco Resources is an independent oil and natural gas company that was originally incorporated in October 1955. Exco engages in the exploitation, exploration, acquisition, development and production of onshore U.S. oil and natural gas properties with a focus on shale resource plays. The company's principal operations are conducted in certain key U.S. oil and natural gas areas including Texas, Louisiana and the Appalachia region.


  • Prem Watsa's Fairfax Financial 2015 Annual Report

    To Our Shareholders:

    Fairfax had another excellent year in 2015 even though it was not obvious in the numbers, as book value per share increased by only 4.5% (including the $10(1) per share dividend paid in 2015) to $403 per share because of our very cautious view of financial markets. All of our concerns about the financial markets may be coming to a head in early 2016, as I write this report to you. More on that later.


  • Both Insiders and Gurus Are Buying These 3 Companies

    GuruFocus has various tools and screeners available to make the quest for your next great investment a little bit more efficient. A tool that I am fond is the Double Buy screen. By employing it you can easily screen a list of stocks that have been tapped by both gurus and insiders. Both types of events tend to trigger my interest, but when they occur simultaneously, it is time to pay close attention. I regularly review the list, and today I want to highlight three stocks from the top 10 that really stand out to me because of the combined buying data.

    EXCO Resources (NYSE:XCO)


  • Warren Buffett's Ratio Shows Market Is Overvalued

    Many investors would love to predict the market to know whether the market is on the uptrend or downtrend. It’s really hard to do, and I personally think it’s impossible to predict the market, especially in a short-term. However, it is possible and useful to have a general idea of whether the overall market is overvalued, fairly valued or undervalued. We don’t need to know the absolute number to determine the state of the market, but we can have the feel for it. Benjamin Graham, the father of value investing, has said: “You don’t have to know a man’s exact weight to know that he’s fat.”

    Warren Buffett (Trades, Portfolio) has given us the ratio that he uses to determine the attractiveness of general market. It’s the ratio of total market capitalization of all U.S. public traded companies to the country's GNP. Buffett has said “The ratio has certain limitations in telling you what you need to know. Still, it is probably the best single measure of where valuations stand at any given moment.” He recommended buying into the market when the ratio falls into the 70% to 80% area. But if investors buy into the market when the ratio reaches 200%, like the market condition in 1999, investors are “playing with fire.”


  • Prem Watsa Increases Portfolio Hedges to Protect Against Market Drop

    Investor Prem Watsa (Trades, Portfolio) has increased his portfolio hedges up to 100% of his equity investment portfolio since the start of the year to protect against volatility, he said Thursday.

    The hedges represent an increase from an 88.1% equity hedge Watsa, the founder of insurance conglomerate Fairfax Financial Holdings (TSX:FFH) in Canada, had in place at year-end. The increase consisted of $938 million in short positions in equity and equity index total return swaps. Watsa said he made the move “in response to the significant appreciation in equity market valuations and uncertainty in the economy.”


  • Prem Watsa's 5 Largest New Buys

    Prem Watsa (Trades, Portfolio), whose investing of the float of his Canadian insurance conglomerate has drawn comparisons to Warren Buffett (Trades, Portfolio) and Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B), revealed the new fourth-quarter investments he made on Friday.

    Watsa bet on seven new companies, the largest of which were Turquoise Hill Resources Ltd. (NYSE:TRQ), Eros International Plc (NYSE:EROS), Solera Holdings Inc. (NYSE:SLH), Precision Castparts Corp. (NYSE:PCP) and RealD Inc. (NYSE:RLD). He had 33 positions in total, valued at $1.2 billion.


  • Prem Watsa Sells Polypore, Advent Software

    Fairfax was founded in 1985 by the present chairman and CEO Prem Watsa (Trades, Portfolio), and is headquartered in Toronto, Canada. The following are Watsa’s most heavily weighted trades during the third quarter.

    The firm sold out its stake in Polypore International Inc. (PPO) with an impact of 0.15% on the portfolio.


  • Are Tech Stocks Prem Watsa Called ‘Speculative’ Worse at Close of Year?

    Prem Watsa (Trades, Portfolio) has a top holding in cell phone maker BlackBerry Ltd. (NASDAQ:BBRY), but early in 2015 he said many major companies of the high tech industry were in speculation territory.

    Watsa, the founder of rapidly growing, Berkshire Hathaway-style Fairfax Financial Holdings (TSX:FFH) is a conservative investor who buys low-priced, low-valuation stocks. In the past several years, some of his standout investments included gutsy bets on the Bank of Ireland and in careening Greek companies. He panned tech stocks in his annual letter this year though, listing companies he viewed as overvalued in a table.


  • Prem Watsa Buys Stock Buffett Sold, 2 Other Holdings

    Prem Watsa (Trades, Portfolio)’s Fairfax Financial Holdings, a Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B)-style insurance conglomerate with a stock portfolio, purchased three new stocks in the recent quarter, one of which is a former Warren Buffett (Trades, Portfolio) holding, he reported Friday.

    Watsa started positions in Altera Corp. (NASDAQ:ALTR), Yodlee Inc. (NASDAQ:YDLE) and POSCO (NYSE:PKX), bringing his total holdings to 40 in a portfolio valued at $1.08 billion. Buffett sold his stake in steelmaker POSCO, which totaled 5.1% of its shares at the end of 2012, in March, which negatively impacted the stock. Shares have declined 43% year to date.


  • IBM: A Stalwart With a 2% Yield and Strong Potential

    IBM (NYSE:IBM) offers system hardware, infrastructure software, outsourcing and systems integration services, all within the IT industry. The company operates a global network that stretches across 150-plus countries and generates over half of sales outside North America.

    The tech stalwart is currently under pressure (see sales chart below), as it is not well-positioned to benefit from the rapid shift in the enterprise market towards cloud computing. Historically the company heavily relied on selling mainframes and supporting services/software to large enterprises. This type of IT infrastructure is rapidly becoming obsolete, with companies instead buying processing power on demand in the cloud.


  • Prem Watsa's Best Performing Holdings

    Prem Watsa (Trades, Portfolio), through his hedge fund Fairfax Financial Holdings, manages a portfolio composed of 49 stocks with a value of $1,364 million.

    With help from the All-In-One Screener, the following are the stocks in his portfolio with the highest return since the beginning of the year.


  • Prem Watsa Bought Kennedy-Wilson, Cut Dresser-Rand in Second Quarter

    Fairfax Financial Holdings Limited was founded in 1985 by the present chairman and chief executive officer, Prem Watsa (Trades, Portfolio). Fairfax is a holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management.

    Prem Watsa (Trades, Portfolio) manages a portfolio composed of 49 stocks with a total value of $1,364 million; during the second quarter he bought eight new stocks, increased two and reduced two of his existing stakes and sold out two stocks. The following are the most heavily weighted trades:


  • Prem Watsa’s Key Portfolio Holdings On Sale for the Brave

    With this week’s pummeling of Eurobank Ergasias (OTCPK:EGFEY), the stock joins several other big positions in Prem Watsa (Trades, Portfolio)’s portfolio that have faced setbacks and are trading at half his purchase price or more.

    Equities accounted for $500 million of $1.3 billion in total unrealized losses in Watsa’s portfolio in the second quarter, as the market price of several of his key positions slid. A net $677 million in portfolio losses drove an $8.87 net loss per share at his investment vehicle, Fairfax Financial Holdings (TSX:FFH), according to a research note by RBC Capital Markets analyst Mark Dwelle, CFA.


  • Prem Watsa Buys 8 Diverse New Holdings in Second Quarter

    Frequently dubbed “the Canadian Warren Buffett (Trades, Portfolio),” Prem Watsa (Trades, Portfolio), founder and CEO of Fairfax Financial Holdings (TSX:FFH), reported eight new stock purchases from a variety of industries for the second quarter.

    Overall he held 49 stocks in a portfolio valued at $1.4 billion at second quarter end. His uppermost sector represented was Technology at 44.3%, followed by Basic Materials at 24.1% and Real Estate at 16.1%.


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