Premium content from Motley Fool Canada
Fellow Fools,
There’s a groundswell of change happening across our nation, as Canadians unite in response to challenges posed by our southern neighbors.
Our government is taking decisive steps to protect and assert our economic interests, from imposing counter-tariffs to exploring alternative energy alliances. And Ottawa’s strategic actions are echoed by the everyday decisions of Canadians like you.
Recent surveys reveal that 85% of Canadians are ready to swap U.S. consumer goods for homegrown alternatives. And even though Canadians spent more than US$20 billion traveling to the U.S. last year, a recent survey revealed that nearly half of Canadians would rather alter their travel plans than visit the United States.
But there’s more we can do, and that’s where your savvy investment choice comes into play. We collectively hold more than US$1.5 trillion in U.S. equities, making Canada the largest foreign investor in the U.S. market. Imagine the power of redirecting even a fraction of this capital back to Canadian ventures — it’s substantial enough to make a significant impact.
In our new report, “Made in Canada: 5 Homegrown Stocks Ready for the ‘Buy Local’ Revolution,” we spotlight five exceptional Canadian stocks that merit your attention. These companies not only drive their profits back to Canada, fueling our economy, but we also think they can outperform the market. This one-time, non-recurring purchase includes five Canadian investment ideas and is valued at $49 — though we’re sharing a bonus idea here FREE.
Buying any of these stocks will help propel Canada’s economic resilience. It’s something we can all do together, one smart investment at a time.
Foolishly yours,
Nick Sciple,
Senior analyst, Stock Advisor Canada
PS: The report features swaps for popular U.S. stocks like Nike and Walmart — and keeps your investing dollars at home.
“Made in Canada” Pick #1: Instead of Berkshire Hathaway, Buy …
Fairfax Financial (TSX: FFH)
Billionaire Prem Watsa is often described as “the Warren Buffett of Canada,” and his company, Fairfax Financial (TSX:FFH), is indeed a lot like Buffett’s Berkshire Hathaway. Fairfax is a holding company that owns a number of companies — mostly insurance businesses.
Fairfax has two main ways of making money:
- Insurance. The company had record underwriting profits of $1.8 billion on record gross premiums of $33 billion in 2024.
- Investments. Fairfax’s investment portfolio has grown from $39.3 billion in 2017 to $67.4 billion in 2024. Fairfax generated record interest and dividend income of $2.5 billion in 2024. (That’s an increase in interest and dividend income of 316% since 2017.)
The best part for long-term shareholders is that those increased earnings have been spread out over fewer shares. Fairfax has reduced the number of shares available by almost 22% over seven years, from 27.8 million in 2017 to 21.7 million in 2024, which has returned capital to investors. Watsa currently owns more than 9% of the outstanding stock.
Despite Fairfax’s stock gaining 48% in 2024 (excluding the $15 per share dividend), it remains reasonably priced today at 1.2 times its book value per share. And when you combine insurance profits and timely investments, the business should be able safely earn around $4 billion per year. That means the company is trading below 10 times earnings. As a bonus, Fairfax’s global insurance operation and investment shop face little impact from the escalating tariff wars.