Fairfax Financial Holdings (TSX:FFH) isn’t just a strong performer — it’s been a market-crushing machine. Despite trading near all-time highs, I believe this stock still offers compelling upside for long-term investors. Here’s why it’s worth your attention, even after such a massive run.
Crushing the market — year after year
Fairfax has built an extraordinary track record. Over the past decade, the company has delivered annualized returns of 17.3%, turning a $10,000 investment into approximately $49,290. In contrast, the broader Canadian market — as represented by iShares S&P/TSX 60 Index ETF — returned just 11.7% over the same period, growing that same $10,000 to about $30,280.
Even more impressively, in the last five years, Fairfax stock has exploded with compound annual returns of 47%. A $10,000 investment in 2020 would be worth roughly $69,600 today, far outpacing the market’s 16.4% annual return, which grew to just $21,370.
So, what’s powering these gains? It’s not luck — Fairfax is executing brilliantly across multiple fronts.
Multiple growth engines firing
The company’s core property and casualty (P&C) insurance business is performing exceptionally well, with strong underwriting profits providing a rock-solid foundation. In the first half of 2025, Fairfax reported net premiums written of US$14.1 billion — a 6.8% increase year over year. Its net insurance revenue grew by 4.3%, reaching US$12.6 billion.
But Fairfax’s strength doesn’t stop at insurance. Its diversified portfolio is reaping the benefits of higher interest rates, bringing in almost US$1.1 billion in interest and dividends in just six months — a 4.6% increase year over year.
Its value-focused capital allocation strategy also adds to the appeal: the company doesn’t overpay and invests in opportunities that offer long-term upside. Here’s an example: its recent acquisition of a 33% stake in French insurer Albingia to further expand globally.
All of this supports consistent growth in book value per share, which has surged 150% in just five years — a solid indicator of intrinsic value creation.
Strong financials, room to run
Fairfax’s financial position is as robust as ever. The company holds an A- credit rating from S&P, has more than US$3.0 billion in cash and marketable securities, and owns an additional US$1.9 billion in investments in associates and non-insurance businesses.
At around $2,400 per share today, Fairfax may not look cheap at first glance. But analysts peg the stock’s fair value closer to $2,669, suggesting a roughly 10% discount (or about 11% upside from current levels).
For a company with this kind of consistency, balance sheet strength, and long-term performance, that’s a rare opportunity — even near all-time highs.
Investor takeaway: A buy on strength. Add on weakness
Yes, Fairfax has already delivered incredible returns. But this is not a case of “you missed it.” With disciplined management, global expansion, rising investment income, and a fortress balance sheet, Fairfax still has room to grow.
Long-term investors may consider starting a position now, especially within a Tax-Free Savings Account or Registered Retirement Savings Plan for tax-efficient compounding. Some platforms, like Wealthsimple, offer the capability to purchase partial shares with no commission fee. If the market pulls back, that could present a golden opportunity to add on weakness.
Fairfax isn’t just a top-notch Canadian stock — it’s a top-notch business. And despite trading near its highs, I still think it’s a buy.
