A Closer Look at Fairfax Financial's 5 Largest Holdings

by: Jersey Trader

Fairfax Financial Holdings (OTCPK:FRFHF) is a Canadian insurance company that is often likened to Berkshire Hathaway (NYSE:BRK.A). Both have strong records of increasing book value and are very shareholder friendly. In addition, both companies' stock portfolios have beaten the market consistently. Over the last 15 years, Fairfax Financial's stock portfolio has outperformed the S&P 500 by a little over 10% per year.

Since I'm bullish on Fairfax Financial and I've looked at Berkshire Hathaway's portfolio before, I decided to take a closer look at Fairfax Financial's portfolio:

Johnson & Johnson (NYSE:JNJ) - Johnson & Johnson, incorporated in 1887, is engaged in the research and development, manufacture and sale of a range of products in the healthcare field. The company operates in three business segments: Consumer, Pharmaceutical and Medical Devices and Diagnostics. (full description)

% of Fairfax Financial's Stock Portfolio 17%
Enterprise Value / EBITDA 7.66
Total Debt / Equity (%) 30%
Return on Investment (%) 17%

AbitibiBowater Inc. (ABH) - AbitibiBowater Inc., incorporated on January 25, 2007, is a producer of newsprint and coated and specialty papers. In addition, it produces and sells market pulp and wood products. As of December 31, 2009, the company owned or operated 23 pulp and paper manufacturing facilities located in Canada, the United States, the United Kingdom and South Korea and 26 wood products facilities located in Canada. (full description)

% of Fairfax Financial's Stock Portfolio 12%
Enterprise Value / EBITDA N/A
Total Debt / Equity (%) N/A
Return on Investment (%) -39%

Dell Inc. (NASDAQ:DELL) - Dell is a holding company, which conducts its business globally through its subsidiaries. It offers a range of product categories, including mobility products, desktop personal computers (PCs), software and peripherals, servers and networking and storage. The services include a range of configurable information technology (IT) and business related services, including infrastructure technology, consulting and applications, and business process services. (full description)

% of Fairfax Financial's Stock Portfolio 12%
Enterprise Value / EBITDA 4.46
Total Debt / Equity (%) 77%
Return on Investment (%) 16%

Frontier Communications Corp (NYSE:FTR) - Frontier Communications Corporation (Frontier), incorporated in 1935, is a communications company providing services predominantly to rural areas and small and medium-sized towns and cities. The company offers a variety of voice, data, Internet and television services and products, some that are available a la carte, and others that are available as bundled or packaged solutions. (full description)

% of Fairfax Financial's Stock Portfolio 7%
Enterprise Value / EBITDA 8.82
Total Debt / Equity (%) 159%
Return on Investment (%) 5%

International Coal Group, Inc. (NYSE:ICO) - International Coal Group is a producer of coal in Northern and Central Appalachia with a range of mid to high British thermal unit (Btu), low to medium sulfur steam and metallurgical coal. The company's Appalachian mining complexes are located in West Virginia, Kentucky, Virginia and Maryland. It also has a complementary mining complex of mid to high sulfur steam coal located in the Illinois Basin. (full description)

% of Fairfax Financial's Stock Portfolio 7%
Enterprise Value / EBITDA 11
Total Debt / Equity (%) 44%
Return on Investment (%) 2%

The full portfolio of Fairfax Financial is below.

Disclosure: I am long FRFHF.PK.