Long-term trends should feed their growth

Article Excerpt

FAIRFAX FINANCIAL HOLDINGS $364.55 (Toronto symbol FFH: SI Rating: Average) (416-367- 2612; www.fairfax.ca; Shares outstanding: 16.8 million; Market cap: $6.1 billion) is a financial-services holding company with assets of $27.9 billion. Fairfax engages in insurance, reinsurance and investment management. Prem Watsa is the company’s chairman and founder. Fairfax trades at a high price, but you can buy an odd lot of as few as 10 or so through any broker. Reinsurers sell insurance to insurers. Fairfax does this through two subsidiaries: OdysseyRe and Group Re. Crum & Forster is Fairfax’s main U.S. insurance subsidiary, and Northbridge Financial is its principal subsidiary in Canada. It also sells insurance in Asia. In the three months ended June 30, 2008, Fairfax’s earnings jumped to $275.4 million, or $15.65 a share, from $27.6 million, or $0.84. The latest quarter included $214.7 million of net gains on investments. Smart investments help boost profits Fairfax’s insurance operations have remained consistently profitable. Insurance businesses tend to hold a lot of…

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