Fairfax Financial Boosts Stake in Newspaper Publisher Torstar to 18%

Let's get this week underway by noting something that happened at the end of the last one. Fairfax Financial (FFH) announced that it now owns 18% of the non-voting shares of newspaper publisher Torstar:

“It’s a value investment. We think it’s a good investment that will create long-term value,” said Paul Rivett, vice-president and chief legal officer at Fairfax, a financial-services holding company with interests in the insurance business.

Prem Watsa raised eyebrows when he and Francis Chou bought shares in Overstock.com. And drew comments from some observers who thought they saw dots to connect in some sort of conspiracy scenario. And now, he'll raise even more with his increased purchase of a newspaper stock.

My exposure to Overstock.com is limited to my being a Fairfax shareholder. Ditto Torstar. My hunch is that Watsa bought Overstock because its shares trade at less than one-third of annual sales. Or it did the last time I checked. And he bought Torstar because he has conviction it too is undervalued.

But let's not get carried away. Fairfax's investment portfolio is very conservative and you can be sure that Prem isn't betting the ranch on newspapers or internet retailers.