Fact based stock research
Fairfax (TSX:FFH)

CA3039011026

How to read the free ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Fairfax stock research in summary

fairfax.ca

ANALYSIS: With an Obermatt Combined Rank of 96 (better than 96% compared with investment alternatives), Fairfax (Property & Casualty Insurance, Canada) shares have much better financial characteristics than comparable stocks. Shares of Fairfax are a good value (attractively priced) with a consolidated Value Rank of 71 (better than 71% of alternatives), show above-average growth (Growth Rank of 65), and are safely financed (Safety Rank of 65), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 96, is a strong buy recommendation based on Fairfax's financial characteristics. As the company Fairfax's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 71), above-average growth (Obermatt Growth Rank of 65), and indicate that the company is safely financed (Obermatt Safety Rank of 65), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of Fairfax. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	71
Growth Rank	65
Safety Rank	65
Combined Rank	96

Country	Canada
Industry	Property & Casualty Insurance
Index	TSX Composite
Size class	XX-Large

This stock has achievements: Top 10 Stock.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Fairfax

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	92	95	96	71
GROWTH
GROWTH	88	43	95	65
SAFETY
SAFETY	88	65	65	65
SENTIMENT
SENTIMENT	n/a	73	98	^new
360° VIEW
360° VIEW	n/a	95	100	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Fairfax is in the corresponding investment strategy.
Upgrade to a Premium Account to access the latest ranks.

Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	92	95	96	71
GROWTH
GROWTH	88	43	95	65
SAFETY
SAFETY	88	65	65	65
COMBINED
COMBINED	100	96	96	96

Last update of combined financial performance: 6-Oct-2022. Stock analysis on combined financial performance: The higher the rank of Fairfax the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 71 (better than 71% compared with alternatives), Fairfax shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Fairfax. Price-to-Profit (also referred to as price-earnings, P/E) is 95 which means that the stock price compared with what market professionals expect for future profits is lower than for 95% of comparable companies, indicating a good value concerning Fairfax's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 83, which means that the stock price is lower as regards to invested capital than for 83% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 55% of alternatives (only 45% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 67% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 71, is a buy recommendation based on Fairfax's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high concerning expected revenues, the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting Group or BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than distribute it to shareholders through dividends, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	81	85	69	45
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	95	93	100	95
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	76	85	88	83
DIVIDEND YIELD
DIVIDEND YIELD	56	43	36	33
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	92	95	96	71

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Fairfax; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 65 (better than 65% compared with alternatives), Fairfax shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Fairfax. Sales Growth has a rank of 76 which means that currently, professionals expect the company to grow more than 76% of its competitors. Capital Growth is also above 6% of competitors with a rank of 83, and Stock Returns with the rank of 65 is also an outperformance. Only Profit Growth is low with a rank of 6 which means that currently, professionals expect the company to grow its profits less than 94% of its competitors. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 65, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, Fairfax is a good growth stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	85	16	34	76
PROFIT GROWTH
PROFIT GROWTH	4	100	100	6
CAPITAL GROWTH
CAPITAL GROWTH	n/a	13	95	83
STOCK RETURNS
STOCK RETURNS	63	71	91	65
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	88	43	95	65

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Fairfax.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 65 (better than 65% compared with alternatives), the company Fairfax has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Fairfax is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Fairfax and the other two below average. Refinancing is at 66, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 66% of its competitors. But Leverage is high with a rank of 48, meaning the company has an above-average debt-to-equity ratio. It has more debt than 52% of its competitors. Liquidity is also on the riskier side with a rank of 43, meaning the company generates less profit to service its debt than 57% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 65 (better than 65% compared with alternatives), Fairfax has a financing structure that is safer than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Fairfax are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. In the long-term, investors may have a debt challenge with Fairfax and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	94	16	53	48
REFINANCING
REFINANCING	57	66	66	66
LIQUIDITY
LIQUIDITY	88	8	28	43
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	88	65	65	65

Last update of Safety Rank: 6-Oct-2022. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Fairfax and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	72	91	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	30	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	61	92	^new
MARKET PULSE
MARKET PULSE	n/a	76	69	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	73	98	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Fairfax.
Upgrade to a Premium Account to access the latest ranks.