Historically, FFH has focused on compounding book value per share and paying minimal dividends. The company – also famously referred to as “Canadian Berkshire Hathaway”, has compounded book value per share at around 15% on average. However, in the last ten years, performance has not been impressive, book value compounded around 8%, while most earnings are paid out as dividends. However, FFH has performed well in recent quarters and now trading at 0.9x times' Price/Book. Growth in revenue and book value per share have reaccelerated. The company has started repurchasing shares at a more aggressive pace in the last two years indicating management believes shares are undervalued. During 2022, FFH also repurchased shares worth $348M. Going forward, management still expects to compound book value per share by 15% annually, although we think this is quite a high bar to achieve. Overall, we like the name and we think valuation is attractive here. At 10X earnings, momentum has picked up and we think the outlook has improved somewhat for the company.
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