Fairfax India Holdings (FIH-U.TO), mcap=$1.4bn, price $10.18 vs $10.54

$FIH.TO pitch:
– Prem Watsa company trading at 0.56x BV.
– A bet on it means reverting closer to 0.8x – 0.9x BV as it has done a number of times in the past.
– Trades at discount to BV due to a drop in the Indian Rupee, emerging markets being out of favor, and investors being scared of the impact of high energy prices on emerging markets.
– BV per share has doubled over the last 7 years.
– History of large buybacks and ongoing open market purchases.
– Current BV calculations appear to be based on conservative assumptions.

$FIH.TO valuation:
– Trades at 0.56x BV.
– Has traded above BV multiple times when people love Prem Watsa.
– Expected to revert to 0.85x BV.

Exp. gain: +50% to 0.85x BV.

Full FIH.TO write-up (free guest account required):

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