Opinions
Michael Smedley
Fairfax India Holdings Corp
FIH.U-T
PAST TOP PICK
Jan 18, 2018
Stock price when the opinion was issued
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He's heding his currency, because he expects the Canadian dollar will go down, so he wants cash flow outside the country to hedge this cash flow. He also wants to get rid of some of North American financials. Only 5% of home owners in India have insurance, so there's massive growth. He has faith in Prem Watsa. (Analysts’ price target is $16.75)
India is one of those areas of the world where people talk of the long term story. They are relatively insulated from trade wars. He is caught on the long term India market. It is expensive. He owns SCIF-N.
One of his highest-conviction investment ideas. Trades at a discount to NAV. A stock to buy for the next decade. India is the largest democracy on the planet, very young demographic, fast-growing economy. Lots of pro-growth and pro-business reforms happening.
Portfolio of $3.5B worth of different investments, both public and private. Crown jewel is 74% stake in Bangalor Airport, a high-quality global infrastructure asset; its eventual spinout could be a real catalyst for the share price. No dividend.
(A Top Pick July 14/17. Up 5%.) Of all things in Fairfax, this one appeals to him. It gives the ordinary investor a way of getting into India. Also gives them a way of getting into a hands-on situation. Not just a portfolio of Indian stocks, but part of a creation/transformation of companies with some leaning towards environmental satisfying things. You need patience. When dealing with Prem Watsa, you know that you are dealing long-term with something like this. The stock is off a bit at the moment. Not a lot of interest in it.