Fairfax Financial Holdings Limited (FRFHF)
Financial Services · PNK · US
Fundamentals
Valuation and ratings
Fairfax Financial Holdings Limited trades at USD1,655.00, close to the USD1,717.08 our discounted cash flow model puts on the business. On this measure the market and the model broadly agree, so the interesting question is which of them is wrong.
Our moat model scores it 56 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 8.2 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Fairfax Financial Holdings Limited
Fairfax Financial Holdings Limited, through its subsidiaries, provides property and casualty insurance and reinsurance, and investment management services in Canada, the United States, the Middle East and Asia, and internationally. It operates through Property and Casualty Insurance and Reinsurance; Life insurance and Run-off; and Non-Insurance Companies segments. The company offers property insurance, which insures against losses to property from fire, explosion, and terrorism, as well as natural perils, such as earthquake, windstorm, and flood; and engineering problems, including boiler explosion, machinery breakdown, and construction defects. It also provides casualty insurance, which insures against accidents, and workers' compensation and automobile; employers' liability, accident and health, medical malpractice, cyber, and professional liability and umbrella coverage; specialty insurance comprising marine, aerospace and surety risk, and other various risks and liabilities; and reinsurance products. In addition, the company engages in the franchising, owning, and operating of restaurants; specialty sleep retailing; sports lifestyle retailing; owns and operates holiday resorts; originates, processes, and distributes value-added pulses and staple food; develops, invests, and manages hospitality real estate; and designs, manufactures, and distributes performance sports related equipment, and related apparel and accessories. Further, it offers travel and travel-related financial services; infrastructure support services; advanced digital tools for agriculture; and value-added milk, fats, fresh confectionery, and plant-based bulk ingredients. The company was formerly known as Markel Financial Holdings Limited and changed its name to Fairfax Financial Holdings Limited in 1987. Fairfax Financial Holdings Limited was incorporated in 1951 and is headquartered in Toronto, Canada.
FRFHF passes 1 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Common questions
Is Fairfax Financial Holdings Limited (FRFHF) undervalued?
Against our discounted cash flow estimate of USD1,717.08, FRFHF at USD1,655.00 is 4% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
What is FRFHF's P/E ratio?
FRFHF trades at 8.2 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
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Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.