{"id":62088,"date":"2023-09-17T10:46:18","date_gmt":"2023-09-17T14:46:18","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/tracking-prem-watsas-fairfax-financial-holdings-portfolio-q2-2023-update-tsxffhca\/"},"modified":"2023-09-17T10:46:23","modified_gmt":"2023-09-17T14:46:23","slug":"tracking-prem-watsas-fairfax-financial-holdings-portfolio-q2-2023-update-tsxffhca","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=62088","title":{"rendered":"Tracking Prem Watsa\u2019s Fairfax Financial Holdings Portfolio \u2013 Q2 2023 Update (TSX:FFH:CA)"},"content":{"rendered":"
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This article is part of a series that provides an ongoing analysis of the changes made to Prem Watsa’s 13F portfolio on a quarterly basis. It is based on Watsa’s regulatory 13F Form filed on 8\/14\/2023. Please visit our Tracking Prem Watsa’s Fairfax Financial Holdings Portfolio series to get an idea of his investment philosophy and our <\/span>previous update for the fund’s moves during Q1 2023.<\/span><\/p>\n

This quarter, Watsa’s 13F portfolio value increased from $1.75B to $1.88B. There are 61 securities in the portfolio, but it is concentrated among a few large stakes. The focus of this article is on the larger (greater than 0.5% of the portfolio each) equity holdings. The top three positions are Occidental Petroleum, Blackberry, and Micron Technology. Together, they account for ~46% of the entire 13F portfolio.<\/p>\n

Note 1: Fairfax Financials’ (OTCPK:FRFHF) 13F holdings only represent a small portion of their overall investment portfolio. The total size as of Q2 2023 was ~$58B of which ~$6.5B was in cash and short-term positions. FRFHF currently trades at ~$846 compared to Book Value (Q2 2023) of ~$834 per share. The equity portfolio was 100% hedged starting from around 2003, but those were removed in Q4 2016.<\/span><\/p>\n

Note 2: Prominent equity allocations not in the 13F report include investments in Greece and India (OTCPK:FFXDF). Greek allocation primarily consists of a ~32% ownership of Eurobank (OTCPK:EGFEY) (OTCPK:EGFEF). Other prominent stakes include ~27% of Thomas Cook India, 54% of Bangalore International Airport Limited, and 31% of Quess Corp Limited.<\/p>\n

Stake Disposals:<\/h2>\n

Bank of America (BAC):<\/strong> The 5.55% BAC stake was established during Q2 and Q3 2022 at prices between ~$27 and ~$37. It was sold this quarter at prices between ~$27 and ~$31. The stock currently trades at $28.84.<\/p>\n

Chevron Inc. (CVX):<\/strong> The ~3% of the portfolio CVX stake was doubled in Q2 2022 at prices between ~$142 and ~$181. The disposal this quarter was at prices between ~$151 and ~$172. The stock is now at ~$167.<\/p>\n

Stake Increases:<\/h2>\n

Occidental Petroleum (OXY):<\/strong> OXY is now the largest 13F stake at ~19% of the portfolio. It was built during the last four quarters at prices between ~$57 and ~$67. The stock is now at $66.15.<\/p>\n

Micron Technology (MU):<\/strong> MU is currently the third largest 13F position at ~13% of the portfolio. It saw a ~60% stake increase in Q1 2019 at prices between $31 and $44. The position was increased by ~115% in Q1 2020 at prices between $34.50 and $60. That was followed with a whopping ~400% stake increase during Q3 2022 at prices between ~$49 and ~$65. That was followed with a ~12% further increase last quarter. The stock currently trades at ~$70. There was a marginal increase this quarter.<\/p>\n

Orla Mining (ORLA):<\/strong> ORLA is a 4.41% of the portfolio stake purchased during Q3 2022 at prices between ~$2.40 and ~$3.70. The last quarter saw a ~45% stake increase at prices between ~$3.85 and ~$4.90. That was followed with another ~30% increase this quarter at prices between ~$3.90 and ~$4.85. The stock currently trades at $4.50.<\/p>\n

Stake Decreases:<\/h2>\n

Alphabet Inc. (GOOGL):<\/strong> GOOG is a ~2% stake purchased in Q1 2020 at prices between ~$53 and ~$76. There was a ~22% stake increase in Q4 2020 at prices between ~$71 and ~$91. This quarter saw a marginal reduction. The stock currently trades at ~$138.<\/p>\n

General Electric (GE):<\/strong> The very small 0.58% stake in GE was reduced by ~45% this quarter.<\/p>\n

Kept Steady:<\/h2>\n

BlackBerry Ltd (BB):<\/strong> BB stake is now at ~14% of the portfolio. The position was first purchased in 2010 at around $50 for 2M shares. The stake was aggressively built up to 46.7M shares in the following years. Their net cost on a fully converted basis is ~$10 per share, and the stock currently trades at $5.39. There has only been very minor activity in the last ten years.<\/p>\n

Note: In Q4 2013, Fairfax co-sponsored a cash-infusion of $1B through convertible debentures ($10 conversion price earning 6% interest) – they financed $500M of that transaction and the remaining was funded by a consortium of other investment funds. In Q3 2016, those shares were redeemed, and new ones issued ($605M in 3.75% debentures convertible at $10 due 11\/13\/2020) to the same entities in a private placement. On 9\/2\/2020, those were redeemed, and new ones issued ($330M in 1.75% debentures convertible at $6 due 11\/13\/2023). Assuming full conversion of these debentures, Fairfax would beneficially own ~16.4% of the business (~102M shares).<\/p>\n

Kennedy-Wilson Holdings (KW):<\/strong> KW stake is a large (top five) 11.54% of the 13F portfolio position, first purchased in 2010. Q4 2016 saw a ~40% increase at prices between $20 and $23 and that was followed with a ~8% increase in Q1 2018. KW currently trades at $16.54.<\/p>\n

Note 1: They also have a 13M share stake in the warrants (7-year term, $23 strike) that they received as part of a $300M investment in perpetual preferred stock (4.5% dividend) made last February. Their overall ownership stake in the business is ~20%.<\/p>\n

Note 2: The original 2010 stake was from a private placement for Kennedy Wilson convertible preferred stock. The total investment from that point through Q3 2016 was $645M. Since then, they invested another ~$85M. By EOY 2015, they had already received distributions of $625M and so the net investment was ~$105M. That is compared to the current market value of ~$225M.<\/p>\n

Crescent Capital BDC (CCAP):<\/strong> CCAP is a 1.68% of the portfolio stake purchased in Q1 2020 at prices between $6.21 and $17.10 and the stock currently trades at $16.78.<\/p>\n

Note: Their ownership stake in the business is ~6.8%.<\/p>\n

Franklin Resources (BEN):<\/strong> The 1.42% BEN position was established in Q1 2020 at prices between $15.30 and $26.25, and it is now at $26.25.<\/p>\n

Alibaba Group Holding (BABA), Bank of Nova Scotia (BNS), General Motors (GM), Helmerich & Payne (HP), Intel Corp (INTC), Johnson & Johnson (JNJ), Merck (MRK), and Pfizer Inc. (PFE):<\/strong> These small (less than ~1.50% of the portfolio each) stakes were kept steady this quarter.<\/p>\n

The spreadsheet below highlights changes to Watsa’s 13F stock holdings in Q2, 2023:<\/p>\n

\n

\"Prem<\/span><\/picture>
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Prem Watsa – Fairfax Financial’s Q2 2023 13F Report Q\/Q Comparison (John Vincent (author))<\/p>\n<\/figcaption><\/figure>\n<\/p>\n

Source: John Vincent. Data constructed from Fairfax Financials’ 13F filings for Q1 2023 and Q2 2023.<\/p>\n

Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

This article is part of a series that provides an ongoing analysis of the changes made to Prem Watsa’s 13F portfolio on a quarterly basis. It is based on Watsa’s regulatory 13F Form filed on 8\/14\/2023. Please visit our Tracking Prem Watsa’s Fairfax Financial Holdings Portfolio series to get an idea of his investment philosophy […]<\/p>\n","protected":false},"author":1,"featured_media":62089,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[236],"tags":[83],"class_list":["post-62088","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-news","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nTracking Prem Watsa\u2019s Fairfax Financial Holdings Portfolio \u2013 Q2 2023 Update (TSX:FFH:CA) | iFintechWorld<\/title>\n<meta name=\"description\" content=\"This article is part of a series that provides an ongoing analysis of the changes made to Prem Watsa's 13F portfolio on a quarterly basis. 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