Fairfax Finl Hldgs (OTC:FRFHF) Stock, Quote.Headers.trade-ideas

Fairfax Finl Hldgs

FAIRFAX FINL HLD SUB

Fairfax provides reinsurance and property and casualty insurance in Canada, the United States, and other international markets. The company also has some noninsurance operations such as restaurants. Fairfax has been led by Prem Watsa, its chairman and CEO, since its formation in 1985.

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Carson Block, founder of Muddy Waters Research, exposes financial manipulation at Fairfax Financial Holdings Limited, leading to a 9% drop in stock. Block criticizes CEO&#39;s family involvement, PwC&#39;s auditing, and overvalued assets, seeking accountability.

Muddy Waters Shorts Fairfax Financial Holdings: &#39;Not The Berkshire Hathaway Of Canada&#39;

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Fairfax Financial Holdings Ltd

RBC Capital analyst Scott Heleniak maintains Fairfax Finl Hldgs (OTC:<a class="ticker" href="https://www.benzinga.com/stock/FRFHF#OTC">FRFHF</a>) with a Outperform and raises the price target from $1425 to $1500.

RBC Capital Maintains Outperform on Fairfax Finl Hldgs, Raises Price Target to $1500

RBC Capital analyst Scott Heleniak maintains Fairfax Finl Hldgs (OTC:<a class="ticker" href="https://www.benzinga.com/stock/FRFHF#OTC">FRFHF</a>) with a Outperform and raises the price target from $1085 to $1200.

RBC Capital Maintains Outperform on Fairfax Finl Hldgs, Raises Price Target to $1200

Carson Block, the founder of Muddy Waters Research, made headlines by announcing a new short position on Fairfax Financial Holdings Limited (OTCPK: FRFHF), targeting the company for what he described as financial <a href="https://www.benzinga.com/topic/short-sellers">manipulation akin to alchemy. </a>
Following the publication of the short report, Fairfax Financial Holdings issued a press release that firmly disagreed with the allegations made by Block regarding its financial practices and book value. 
Interviewed on CNBC&#8217;s &#8216;Squawk Box&#8217; on Thursday, Block explained Fairfax overvalued its assets and income through questionable transactions, suggesting a &#8220;conservative adjustment&#8221; to the book value by approximately $4.5 billion or 18% lower than reported.
Shares of Fairfax Financial Holdings have fallen nearly 9% in response to Muddy Water&#8217;s short report, on track for the worst-performing session since March 16, 2020, when strict COVID-19 lockdowns were announced across the world. 
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="495" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/08121857/FRFHF_2024-02-08_16-18-36_12c58-1024x495.png" alt="" class="wp-image-209626" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/08121857/FRFHF_2024-02-08_16-18-36_12c58-1024x495.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/08121857/FRFHF_2024-02-08_16-18-36_12c58-300x145.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/08121857/FRFHF_2024-02-08_16-18-36_12c58-768x372.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/08121857/FRFHF_2024-02-08_16-18-36_12c58-1536x743.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/08121857/FRFHF_2024-02-08_16-18-36_12c58.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
<h2 class="wp-block-heading">A Dive into Fairfax&#8217;s Financial Practices</h2>
Fairfax Financial, often dubbed the &#8220;Berkshire Hathaway Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BRK#NYSE">BRK</a>) of Canada,&#8221; was under scrutiny by Block for its financial practices. 
According to Block, the company, led by Indian-Canadian billionaire Prem Watsa, known as the &#8220;Canadian Warren Buffett,&#8221; failed to meet its long-term goal of a 15% compound annual growth rate (CAGR) in book value per share since the financial crisis.
&#8220;The reason why is that since its inception, it&#8217;s tried to create this mythos about it that the chairman controlling shareholder is [like a] Warren Buffett&#8230; But the reality is they haven&#8217;t been able to get anywhere near that,&#8221; Block stated.
Instead, the company resorted to value-destructive transactions and the use of off-balance sheet debt to inflate its book value falsely.
<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"> 
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<iframe loading="lazy" title="Muddy Waters&#039; Carson Block on why he&#039;s shorting Fairfax Financial" width="500" height="281" src="https://www.youtube.com/embed/5iac1UIXwZI?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>
</div>
</figure>
Read Also: <a href="https://www.benzinga.com/money/best-broker-for-short-selling">Best Brokers for Short Selling In 2024</a>
One of the examples highlighted by Block is Fairfax&#8217;s investment in Recipe, a chain of restaurants. 
He accused Fairfax of carrying this investment at a value significantly above market price before eventually taking the company private, yet continuing to overvalue it despite deteriorating financial performance.
Block didn&#8217;t shy away from criticizing the governance and auditing processes at Fairfax, especially the involvement of the CEO&#8217;s family on the board and the long-standing relationship with PwC (PricewaterhouseCoopers International Ltd.). 
&#8220;You&#8217;ve got two children of the CEO or controlling shareholder who are on the board of directors,&#8221; Block pointed out, drawing parallels with past financial misdeeds in other companies.
Reflecting on Fairfax&#8217;s resilience against previous short attacks and its navigation through the GFC, Block said, &#8220;The GFC probably actually helped Fairfax,&#8221; as the company was shorting subprime assets at that time. Block distinguishes his new focus on &#8220;consolidated level accounting&#8221; from earlier critiques centered on insurance reserves.
While Block remained discreet about the size of his short position, he clarified his motivations by highlighting the lack of scrutiny from sell-side analysts and positioned his actions as a quest for accountability: &#8220;So yes, we have a significant incentive to talk about this, but I also have the incentive to ask questions that evidently nobody else is doing.&#8221;
<h2 class="wp-block-heading">Fairfax&#8217;s Official Response</h2>
In a press release, Fairfax emphasized its commitment to transparency and integrity, stating, &#8220;Fairfax disagrees with the allegations and insinuations contained in the report, and would like to assure all shareholders that Fairfax has prepared its financial statements and reporting in accordance with all applicable accounting principles.&#8221;
Fairfax highlighted its strong financial performance in recent months, &#8220;through the first nine months of 2023, Fairfax has achieved record earnings driven by record operating income.&#8221;
Read Next: <a href="https://www.benzinga.com/money/how-to-short-a-stock">A Complete Guide On How To Short A Stock</a>
Photo: Shutterstock

Muddy Waters Shorts Fairfax Financial Holdings: 'Not The Berkshire Hathaway Of Canada'

Fairfax Finl Hldgs (OTC:<a class="ticker" href="https://www.benzinga.com/stock/FRFHF#OTC">FRFHF</a>) is set to give its latest quarterly earnings report on Thursday, 2023-08-03. Here's what investors need to know before the announcement.
Analysts estimate that Fairfax Finl Hldgs will report an earnings per share (EPS) of $50.09. 
Fairfax Finl Hldgs bulls will hope to hear the company announce they've not only beaten that estimate, but also to provide positive guidance, or forecasted growth, for the next quarter.
New investors should note that it is sometimes not an earnings beat or miss that most affects the price of a stock, but the guidance (or forecast).
Here's a look at Fairfax Finl Hldgs's past performance and the resulting price change:

<table>
<thead>
<tr>
<th>Quarter</th>
<th>Q1 2023</th>
<th>Q4 2022</th>
<th>Q3 2022</th>
<th>Q2 2022</th>
</tr>
</thead>
<tbody>
<tr>
<td>EPS Estimate</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td>EPS Actual</td>
<td>49.38</td>
<td>78.33</td>
<td>-3.65</td>
<td>-37.59</td>
</tr>
<tr>
<td>Price Change %</td>
<td>-0.72%</td>
<td>0.07%</td>
<td>6.33%</td>
<td>0.07%</td>
</tr>
</tbody>
</table>

<h3>Stock Performance</h3>
Shares of Fairfax Finl Hldgs were trading at $800.0 as of August 01. Over the last 52-week period, shares are up 52.09%. Given that these returns are generally positive, long-term shareholders are likely bullish going into this earnings release. 
<a href="https://www.benzinga.com/quote/FRFHF/earnings">To track all earnings releases for Fairfax Finl Hldgs visit their earnings calendar on our site.</a>
This article was generated by Benzinga's automated content engine and reviewed by an editor.

Earnings

A Preview Of Fairfax Finl Hldgs's Earnings

National Bank Financial Inc analyst Rupert Merer maintains Fairfax Finl Hldgs (OTC:<a class="ticker" href="https://www.benzinga.com/stock/FRFHF#OTC">FRFHF</a>) with a Outperform and raises the price target from C$1150 to C$1225.

National Bank Financial Inc Maintains Outperform on Fairfax Finl Hldgs, Raises Price Target to C$1225

<ul>
<li>RBC Capital&nbsp;analyst Mark A. Dwelle&nbsp;<a class="editor-rtfLink" href="https://www.benzinga.com/quote/FRFHF/analyst-ratings" style="background-image:initial; background-position:initial; background-size:initial; background-repeat:initial; background-attachment:initial; background-origin:initial; background-clip:initial; margin-top:0pt; margin-bottom:0pt; color:#4a6ee0" target="_blank">raised the price target</a>&nbsp;for&nbsp;Fairfax Financial Holdings&nbsp;(TSX: FFH) (OTC: <a class="ticker" href="https://www.benzinga.com/stock/frfhf#OTC">FRFHF</a>) to $750 from $675.</li>
<li>The analyst kept Outperform rating for the shares.</li>
<li>Dwelle stated that the hard market is still driving strong top-line growth and improved underwriting margins, and management did a great job of protecting book value as interest rates rose, positioning them for improved investment results in the future.</li>
<li>While the portfolio is still complex, he added that the value positioning seems to be well matched to current market conditions.</li>
<li>With underwriting contributions improving and the balance sheet as well-positioned, the analyst sees significant room for multiple expansion and views company shares as a best-in-class value opportunity at about 0.85x book value, mentioned the analyst.</li>
<li>The company recently reported its first-quarter results, with net premiums written by the property and casualty insurance and reinsurance operations rising 27.8% and gross premiums written improving 21.9%.</li>
<li>Price Action:&nbsp;FFH shares are trading lower by 7.31% at C$654.26 on TSX, and FRFHF is lower by 7.57% at $508.42 on the last check Monday.</li>
</ul>

What's Going On With Fairfax Financial Shares Today

RBC Capital analyst Mark Dwelle maintains Fairfax Finl Hldgs (OTC:<a class="ticker" href="/stock/FRFHF#OTC">FRFHF</a>) with a Outperform and raises the price target from $585 to $650.

RBC Capital Maintains Outperform on Fairfax Finl Hldgs, Raises Price Target to $650

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