Warren Buffett is widely regarded as one of the top investors of all time. His ability to make calculated decisions and remain highly convicted for decades has made Buffett one of the richest people in the world. With a net worth north of US$102 billion, it’s only natural that investors seek out institutional investors that can find similar success. In this article, I will discuss three stocks led by CEOs that all have a strong case for being Canada’s Warren Buffett.
A name you’ve heard before
When comparing Warren Buffett to Canadian CEOs, the first name that should come to mind is Bruce Flatt. He is the long-time CEO of Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM). In fact, his long tenure as Brookfield’s CEO is one of the main reasons investors have compared him to the Oracle of Omaha. Flatt has also drawn comparisons due to his value investing style and a large ownership stake in his company.
Brookfield Asset Management is an alternative asset management company. It has exposure to the real estate, renewable energy, infrastructure, and private equity spaces. In fact, the company has been so successful in its endeavours that its subsidiaries are household names in Canada. A component of the S&P/TSX 60, Brookfield Asset Management has returned 13.8% annually since the start of Flatt’s tenure as CEO (2002). This means a $10,000 investment at that time would be worth more than $117,000 today.
He’s been named “Canada’s Warren Buffett” by many
Another CEO that has drawn comparisons to Warren Buffett is Prem Watsa. He is the founder, CEO, and chairman of Fairfax Financial Holdings (TSX:FFH). This company was started after Watsa took over a small trucking insurance company in 1985 and transformed it into the conglomerate it is today. Currently, Fairfax Financial’s portfolio consists of 17 subsidiaries; the most well known of which may be Toys “R” Us Canada. The company also holds investments in several companies, including BlackBerry.
Like Warren Buffett’s Berkshire Hathaway, Fairfax Financial is focused on long-term performance instead of short-term gains. It aims to return 15% on an annual basis through continued internal and acquisition growth. Over the past year, Fairfax Financial has seen tremendous returns, gaining 46.9%. This means an investment of $10,000 at this time last year would be worth more than $14,600 today.
The Berkshire Hathaway of the tech sector
The final company that has drawn comparisons to Berkshire Hathaway is Constellation Software (TSX:CSU). Led by its highly respected president, Mark Leonard, the company has been one of the most consistent performers on the TSX since its IPO. As its name suggests, Constellation aims to grow by acquiring great technology companies. Its acquisition criteria has been covered by many in the financial space and has led to the rise of many copycat companies. In fact, Mark Leonard has noted the prevalence of copycat companies in his 2017 president’s letter.
Dividends excluded, Constellation has returned nearly 10,000% since its IPO in 1996. This makes the company one of the few true millionaire-making stocks in Canada. Since October 2007, Constellation Software has returned 39.4% on an annual basis. A $10,000 investment at that time would be worth nearly $900,000 today. This is a monster that has a lot of room to keep growing.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Jed Lloren has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Brookfield Asset Management and Constellation Software. The Motley Fool recommends BlackBerry, BlackBerry, BROOKFIELD ASSET MANAGEMENT INC. CL.A LV, and FAIRFAX FINANCIAL HOLDINGS LTD.