Will Fairfax Financial (USA Stocks:FRFHF) shadow SBM Offshore price rise?

FRFHF Stock  USD 663.79  6.08  0.91%   
While some millenniums may be indifferent towards insurance space, we will examine how stable are Fairfax Financial fundamentals compared to SBM Offshore. We are going to examine some of the competitive aspects of both Fairfax and SBFFF.
Published over a month ago
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Reviewed by Michael Smolkin

By analyzing existing technical indicators between Fairfax Financial and SBFFF, you can compare the effects of market volatilities on both companies' prices and check if they can diversify away market risk if combined in one of your portfolios. You can also utilize pair trading strategies for matching a long position in SBFFF with a short position in Fairfax Financial. Check out our pair correlation module for more information.

Let's begin by analyzing the assets.
The concept of asset utilization usually refers to the revenue earned for every dollar of assets a company currently reports. The current return on assets of Fairfax implies not a very effective usage of assets in February.

How important is Fairfax Financial's Liquidity

Fairfax Financial financial leverage refers to using borrowed capital as a funding source to finance Fairfax Financial Holdings ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Fairfax Financial financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Fairfax Financial's total debt and its cash.

How does Fairfax utilize its cash?

To perform a cash flow analysis of Fairfax Financial, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Fairfax Financial is receiving and how much cash it distributes out in a given period. The Fairfax Financial cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
Fairfax Financial Net Cash Flow from Operations is most likely to decrease significantly in the upcoming years. The last year's value of Net Cash Flow from Operations was reported at (4.42 Billion)

What is the case for Fairfax Financial Investors

Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.

Revenue Breakdown

Lets now check Fairfax Financial revenue. Based on the latest financial disclosure, Fairfax Financial Holdings reported 25.8 B of revenue. This is 130.17% higher than that of the Insurance sector and significantly higher than that of the Financials industry. The revenue for all United States stocks is 173.47% lower than that of Fairfax Financial. As for SBM Offshore we see revenue of 3.75 B, which is much higher than that of the Financials

25.8 B
FRFHF25.8 Billion87.32
SBFFF3.75 Billion12.68

Fairfax Financial has 84 percent chance to finish below USD636 next week

The mean deviation is down to 1.1 as of today. Fairfax Financial Holdings has relatively low volatility with skewness of -0.38 and kurtosis of 0.31. However, we advise all investors to independently investigate Fairfax Financial Holdings to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Fairfax Financial's pink sheet risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Fairfax Financial's pink sheet price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

The Current Takeaway on Fairfax Financial Investment

While some other firms in the insurance—property & casualty industry are either recovering or due for a correction, Fairfax Financial may not be performing as strong as the other in terms of long-term growth potentials. With an optimistic outlook on your 90 days horizon, it may be a good time to buy new shares of Fairfax or increase your existing holdings in the Pink Sheet as it seems the potential growth has not yet been fully factored into the current price. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Fairfax Financial.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Fairfax Financial Holdings. Please refer to our Terms of Use for any information regarding our disclosure principles.

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