The Canadian carnival for capitalists blew through Toronto this month. It started with a boat race, moved to globally dominating lentils, and reached its peak at Roy Thomson Hall, which hosted the Fairfax Financial (FFH-T) annual general meeting.
The race got its start months ago when 24 teams of students competed in the first round of the Ben Graham Centre’s International MBA Stock Picking Competition. Three teams made it to the second round and were given two weeks to evaluate Malibu Boats (MBUU) before travelling to Toronto to defend their analysis in front of a panel of money managers with $14,000 up for grabs.
The students’ efforts never fail to impress and congratulations go to all of them. The top prize this year went to Ben Flaum, Ian Lee, and Tarun Sharma from the Columbia Business School.
If you’re interested in jumping aboard Malibu Boats, two of the teams (including the one from Columbia) thought the stock was worth buying in early April when it was trading near US$25 a share. Mind you, the third team deemed it to be too expensive.
The Ben Graham Centre’s Value Investing Conference filled the next day. Professor George Athanassakos (an award-winning contributor to the Globe and Mail) chaired the conference and brought it to life with three keynote speakers and talks from a bevy of professional value investors.
The morning session kicked off with Columbia professor emeritus Stephen Penman, who recently released his book Financial Statement Analysis for Value Investing (written with professor emeritus Peter Pope.) Professor Penman made the case for using accounting formulas to measure the market’s expectations for a company’s long-term growth rate and its expected return. It’s something I hope to return to in the future.
After lunch, money manager Francis Chou discussed his growing insurance conglomerate Wintaai Holdings. Mr. Chou is influenced by Warren Buffett’s Berkshire Hathaway (BRK.B-N) and his time working at Fairfax with its fair and friendly ways. Mr. Chou’s experience helped him grow Wintaai’s subsidiary Stonetrust’s book value at an average annual rate of 18.7 per cent over the seven years to the end of 2025. (While Wintaii isn’t publicly traded, investors can get exposure to it via Tim McElvaine’s Value Fund.)
The afternoon featured Saskatchewan’s own Murad Al-Katib who is a co-founder and the CEO of AGT Food and Ingredients (AGTF). The company started processing lentils in Saskatchewan and went on to grow into a powerhouse with the addition of packaged food including pulses, pasta, rice, and cereals. Its products are sold in 127 countries and AGT operates 39 manufacturing facilities across five continents.
Mr. Al-Katib is fresh off the company’s initial public offering on the Toronto Stock Exchange, which had the misfortune of hitting the market soon after the U.S. and Israel attacked Iran. Despite the difficult timing, going public helped the company reduce debt and its stock now trades near 17 times forward 12-month analyst earnings estimates. (Fairfax owns nearly 56 per cent of AGT’s shares, according to S&P Global Market Intelligence.) With a little luck, AGT will continue to grow and thereby fill stomachs across the world.
Wednesday provided investors the opportunity to learn about their business ventures in India and Africa. It featured the Fairfax India (FIH.U) annual general meeting in the morning and the Helios Fairfax Partners (HFPC.U) meeting in the afternoon.
Unmentioned, so far, are a slew of events organized by the community that help to elevate the Fairfax lollapalooza. But the 17th annual CoB&F Fairfax Financial Shareholder Charity Dinner is special. It began life as a small informal meeting of Fairfax supporters when the company was beset by short sellers. It grew from there and is now dedicated to raising money for Crohn’s and Colitis Canada.
My friend and former editor David Thomas was the dinner’s keynote speaker. He discussed his new book The Fairfax Way, the company’s history, and some of its more colourful periods that helped it generate compound annual returns of 19.5 per cent over the past 40 years (in U.S. dollar terms.)
Thursday brought with it the main event in the form of the Fairfax annual general meeting, which is always a treat because shareholders can question CEO Prem Watsa and President Peter Clarke directly. They can also learn more about many of the company’s products and services, which are on display in the hall.
I was pleased to see the introduction of Fairfax’s Charitable Giving Report, which details how 2 per cent of the company’s pre-tax earnings are allocated each year to good causes around the world.
In the afternoon the after-parties began and continued for hours. David Thomas likened his tour of them to discovering secret societies. But they follow in Fairfax’s friendly footsteps and welcome newcomers to the fold. So, drop by next year and say hi.
For long-time readers, updates for the portfolios I follow at the Globe and Mail can be found via this link.
Norman Rothery, PhD, CFA, is the founder of StingyInvestor.com.