Fairfax Fin Return On Equity vs. Profit Margin
| FFH-PG Preferred Stock | CAD 21.89 0.02 0.09% |
For Fairfax Fin profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Fairfax Fin to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Fairfax Fin Hld utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Fairfax Fin's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Fairfax Fin Hld over time as well as its relative position and ranking within its peers.
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Fairfax Fin Hld Profit Margin vs. Return On Equity Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Fairfax Fin's current stock value. Our valuation model uses many indicators to compare Fairfax Fin value to that of its competitors to determine the firm's financial worth. Fairfax Fin Hld is rated # 4 in return on equity category among its peers. It also is rated # 4 in profit margin category among its peers fabricating about 0.45 of Profit Margin per Return On Equity. The ratio of Return On Equity to Profit Margin for Fairfax Fin Hld is roughly 2.20 . Comparative valuation analysis is a catch-all model that can be used if you cannot value Fairfax Fin by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Fairfax Fin's Preferred Stock. Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued.Fairfax Profit Margin vs. Return On Equity
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
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For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Profit Margin measures overall efficiency of a company and shows its ability to withstand competition as well as defend against adverse conditions such as rising costs, falling prices, decline in sales or management distress. Profit margin tells investors how well the company executes on its overall pricing strategies as well as how effective the company in controlling its costs.
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In a nutshell, Profit Margin indicator shows the amount of money the company makes from total sales or revenue. It can provide a good insight into companies in the same sector, as well as help to identify trends of a company from year to year.
Fairfax Profit Margin Comparison
Fairfax Fin is rated # 3 in profit margin category among its peers.
Fairfax Fin Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Fairfax Fin, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Fairfax Fin will eventually generate negative long term returns. The profitability progress is the general direction of Fairfax Fin's change in net profit over the period of time. It can combine multiple indicators of Fairfax Fin, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Fairfax Financial Holdings Limited, through its subsidiaries, provides property and casualty insurance and reinsurance, and investment management services in the United States, Canada, Asia, and internationally. Fairfax Financial Holdings Limited was incorporated in 1951 and is headquartered in Toronto, Canada. FAIRFAX FINANCIAL operates under Insurance - Property Casualty classification in Canada and is traded on Toronto Stock Exchange. It employs 043 people.
Fairfax Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Fairfax Fin. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Fairfax Fin position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Fairfax Fin's important profitability drivers and their relationship over time.
Use Fairfax Fin in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Fairfax Fin position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Fairfax Fin will appreciate offsetting losses from the drop in the long position's value.Fairfax Fin Pair Trading
Fairfax Fin Hld Pair Trading Analysis
The ability to find closely correlated positions to Fairfax Fin could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Fairfax Fin when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Fairfax Fin - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Fairfax Fin Hld to buy it.
The correlation of Fairfax Fin is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Fairfax Fin moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Fairfax Fin Hld moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Fairfax Fin can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your Fairfax Fin position
In addition to having Fairfax Fin in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
Run Compulsion Thematic Idea Now
Compulsion
Companies involved in research, development, and manufacturing of products with compulsion characteristics such as cigarettes, addictive drugs and alcohol. The Compulsion theme has 40 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Compulsion Theme or any other thematic opportunities.
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Other Information on Investing in Fairfax Preferred Stock
To fully project Fairfax Fin's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Fairfax Fin Hld at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Fairfax Fin's income statement, its balance sheet, and the statement of cash flows.