Thread: Fairfax Financial Holdings Ltd. FFH

FFH-----These Guys Shorted US Financials....PE OF 3
Fairfax Financial Holdings Limited (FFH) is in the property and casualty insurance and reinsurance business. The stock was up 25.5%. The stock has a P/E of 3
3rd Quarter Ending September 2008
Earnings Whisper
Consensus Estimate: $5.33
Release Date: Not Confirmed 10/30/2008 ---After Close

Weekly
FFH - SharpCharts from StockCharts.com

Fairfax Financial Holdings Ltd. (FFH) reported a more than ten-fold gain in its credit default swap [CDS] investments, selling C$3.22-billion in CDS in the third quarter for C$574.5-million in cash after paying just C$53-million. Fairfax is benefiting from wise bets such as one on the demise of American International Group Inc. (AIG).
As of September 19, 2008, the company said it had C$12.87-billion in the derivatives that act as insurance in case a company defaults on its bonds. Fairfax said they have a market value of C$684.9-million and an original acquisition cost of C$238.1-million.
Prem Watsa, the company?s chairman and chief executive officer said:
Beginning in 2003, we took significant steps, including the purchase of credit default swaps, in an attempt to protect our balance sheet from investment risks.
He added that the early update to its third quarter results was warranted given the unprecedented events in the market recently, particularly given Fairfax?s active share buy-back program.
Fairfax has sold C$8.87-billion in CDS since inception with an original cost of C$197-million for gains of C$1.65-billion. Globally, it is estimated that about $62-trillion in CDS currently exist. Fairfax acknowledged that CDS and many of the company?s other investments are extremely volatile, so its market value and liquidity may change dramatically in a short period of time.
Shares of the Toronto-based financial services firm surged 20% on Friday as the S&P/TSX composite index rose 7%. The company will release its third quarter results after market close on Thursday, Oct. 30 and hold a conference call the following morning.

FFH chart from Big Charts.

FFH watch wacth watch.....baby

FFH - SharpCharts from StockCharts.com

Yesterday I Sold 2 PUTs on FFH FIHVC.X
This is a Bullish PLAY

It is much more dangerous but on low volume options i would rather be on this side of the trade

FIHVC.X: Summary for FFH Oct 2008 310.0000 put - Yahoo! Finance

FFH Oct 2008 310.0000 put
(OPR: FIHVC.X)
Last Trade: 29.50
Trade Time: Sep 29
Change: 0.00 (0.00%)
Prev Close: 29.50
Open: 29.50
Bid: N/A
Ask: N/A
Day's Range: 29.50 - 29.50
Contract Range: 23.30 - 81.60
Volume: 20
Open Interest: 215
Strike: 310.00
Expire Date: 17-Oct-08

FFH Oct 2008 400.0000 call FIHJS.X

I also bought 5 Calls FIHJS.X

FIHJS.X

Very Slow moving Options Chain


FFH Oct 2008 400.0000 call
Last Trade: 3.20
Trade Time: Sep 26
Change: 0.00 (0.00%)
Prev Close: 3.20
Open: 3.20
Bid: N/A
Ask: N/A
Day's Range: 3.20 - 3.20
Contract Range: N/A - N/A
Volume: 1
Open Interest: 28
Strike: 400.00
Expire Date: 17-Oct-08

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FFH ...Up 19.00 on the day

Close to 50.00 on the week

TheStreet.com Ratings Return to Article
TSC Ratings' Updates: Fairfax Financial
TheStreet.com Ratings Staff
10/01/08 - 05:56 PM EDT
The following ratings' changes were generated on October 1.

Fairfax Financial Holdings(FFH Quote - Cramer on FFH - Stock Picks) has been upgraded from hold to buy. Fairfax Financial Holdings Limited, through its subsidiaries, engages in property and casualty insurance and reinsurance, investment management, and insurance claims management businesses. The company also provides claims adjusting, appraisal, and loss management services. FFH registered strong financial performance and had a strong liquidity position at the end of fiscal year 2007. In addition, FFH offers superior returns to its shareholders.

For the full year 2007, FFH's total revenue increased 10.0% to $7.48 billion due to higher gains on investments, higher interest and dividends as well as increased claim fees. Portfolio investments increased 12.6% to $19.09 billion at the end of fiscal year 2007 vs. fiscal year 2006. The combined ratio improved from 95.5% to 94.0% in fiscal year 2007, mainly due to lower claims and losses. As a result, the company's underwriting profit increased 32.3% to $281.30 million. In total, the company registered a net profit of $1.09 million vs. an income of $227.50 million in a year-ago period.

The company continued to reduce its debt through open market purchases. In October 2007, the company completed an offering of $330.00 million of 7-3/4% Senior Notes due May 1, 2017 (2017 Notes) to purchase its costlier 10-3/8% Senior Notes due 2013 (2013 Notes); for a total consideration of approximately $325.70 million. Adding to this, the company had an impressive cash and equivalent balance of $4.18 billion as of second quarter fiscal year 2007 end. The current liquidity position allows FFH to cover unforeseen negativity and freedom from the reliance on external funds.

FFH return-on-equity jumped from 7.56% to 25.44% at the end of fourth quarter fiscal year 2007 and surpassed the average of both the Industry and S&P 500. The growth in ROE was driven by higher earnings over the last twelve month. In addition, on September 20, 2007, FFH announced its intentions to make a Normal Course Issuer Bid for up to 1.0 million of its subordinate voting shares through the facilities of the Toronto Stock Exchange and the New York Stock Exchange. This should boost its ROE looking forward.

Principal risks to our buy rating on the stock include the negative impact of an unfavorable change in interest rates and equity prices, pressure on premium rates resulting from competition, as well as unexpected catastrophic events.

FFH had been rated a hold since August 7, 2008.