Fairfax Financial Holdings (FRFHF) leads earnings release pack

Fairfax Financial Holdings (FRFHF) leads earnings release pack

U.S. gold proof coin. (Wikipedia)
U.S. gold proof coin. (Wikipedia)

WEST PALM BEACH, Florida, February 13, 2013 – Fairfax Financial Holdings (FRFHF), Barrick Gold Corporation (ABX), Alexion Pharmaceuticals (ALXN), Strayer Education, Inc. (STRA) , SPX Corporation (SPW) , Pepsico, Inc. (PEP), and Heartware International, Inc. (HTWR) are among the companies set to announce earnings on 14 February 2013.

Analysts estimate that Fairfax will lead the group in terms of Earnings per Share with a whopping $11.67.

So what’s to like about Fairfax?

According to its web site, “Fairfax Financial Holdings Limited is a financial services holding company whose corporate objective is to achieve a high rate of return on invested capital and build long term shareholder value.  The company has been under present management since September 1985.”

The owner of the company is Prem Watsa, who sets the investment tone and the culture of the company.  For Americans who don’t know Prem Watsa, he is the Warren Buffett of Canada, and also the richest man you have never heard of.  Watsa made his $2 billion (that’s approximate; no one is completely sure of his net worth) by making brilliant investment decisions, and he continues to implement those decisions at Fairfax.  The entire team is exceptionally talented in terms of fixing investments.

Fairfax has had tremendous success.  Since 1985, the company has grown book value per share at close to 25%.  While the company probably can’t continually reach that level of growth, it can meet its own goals of 15% per year, which is still exceptional.

While company is unlikely to have smooth growth, its exposure to emerging markets and Watsa’s hedges are likely to keep it on track.  Its insurance business remains the core of operations, providing the capital to reinvest annually.  Natural disasters obviously take a toll on that part of the business, but even so, it remains a proven money-maker on a big scale.

The stock is currently trading at around $360, and the consensus analyst price target is $430, giving it some room to grow.

The company will announce 2012 year-end results after market close on February 14, 2013.  It will hold a conference call at 8:30 a.m. EST on February 15, 2013, to discuss the results.  To access the call, dial (800) 857-9641 (Canada and U.S.) or 1 (517) 308-9408 (International) with the passcode “Fairfax”.

Barrick Gold Corporation (ABX), the worlds largest gold company, will also announce earnings.  Investors are skeptical after African Barrick Gold Plc announced disappointing earnings yesterday.  The African subsidiary reported lower-than-expected profits and lower production estimates for next year.  Barrick owns a majority stake in the subsidiary, and may take a hit from the poor performance.

One of the leaders in the new model of post-secondary education, Strayer Education, Inc. (STRA), will announce earnings at 10am on February 14.  This is a stock that has analysts on all sides, loving it, hating it and not caring one way or the other.  The stock pays about 7% dividend, annualized to $4.00, and growth is estimated at over 5% annually, which some point to as strong reason to buy.  Others, however, say the stock is a loser, and noted shorters crow about making big money shorting the stock last year.  The company retains strong brand in its market and steady growth, as well as extensive corporate alliances.  However, profits have been down thanks to lower student demand, higher competition and a difficult regulatory environment.  That mixed message probably explains why thirteen equity analysts currently have holds on the stock.

View the full earnings calendar for February 14, 2013 here.

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Lisa M. Ruth
Lisa M. Ruth is Editor-in-Chief of CDN. In addition to her editing and leadership duties, she also writes on international events, intelligence, and other topics. She has worked with CDN as a journalist since 2009. Lisa is also President of CTC International Group, Inc., a research and analysis firm in South Florida, providing actionable intelligence to decisionmakers. She started her career at the CIA, where she won several distinguished awards for her service. She holds an MA in international relations from the University of Virginia, and a BA in international relations from George Mason University. She also serves as Chairman of the Board of Horses Healing Hearts, and is involved with several other charitable organizations, including Habitat for Humanity, The Boys and Girls Clubs of America, and AYSO.