10 Best Stocks to Buy According to Billionaire Prem Watsa

Published April 18, 2022 at 10:55 am EDT Updated August 19, 2026 at 7:48 am EDT

In this article, we will discuss the 10 best stocks to buy according to billionaire Prem Watsa.

Prem Watsa is the founder, Chairman, and CEO of Fairfax Financial Holdings. Some call the Canadian-Indian billionaire the ‘Canadian Warren Buffett’ due to his investment philosophy’s striking similarity to that of the CEO of Berkshire Hathaway Inc. (NYSE:BRK-B).

Born in 1950, Watsa graduated from the Indian Institute of Technology (IIT) Madras with a degree in chemical engineering. He moved to London, Ontario, and completed his MBA from the Richard Ivey School of Business at the University of Western Ontario. After completing his MBA, Watsa joined an insurance company but left it in 1984 to start an investment firm with his ex-boss. A year later, he bought a Canadian trucking insurance company that was on the edge of foreclosure and renamed the entity Fairfax Financial Holdings.

Just like Omaha-based Berkshire Hathaway Inc, Fairfax Holdings has an interest in property and casualty insurance. Furthermore, the hedge fund has stakes in some of the leading companies in the world, like Alibaba Group Holding Limited (NYSE:BABA), BlackBerry Limited (NYSE:BB), and Atlas Corp. (NYSE:ATCO). According to Fortune, Prem Watsa’s worth stands at $1.1 billion as of April 17.

Our Methodology

In this article, we will be discussing the top 10 stock picks of Prem Watsa’s Fairfax Financial Holdings. We picked these stocks from the Q4 13F portfolio of Fairfax Financial Holdings. These top 10 holdings have a cumulative value of $2.89 billion and occupy 91% of Watsa’s portfolio.

The hedge fund data discussed is based on the 924 hedge funds tracked by Insider Monkey at the end of Q4 2021.

10 Best Stocks to Buy According to Billionaire Prem Watsa

10. Pfizer Inc. (NYSE:PFE)

Prem Watsa’s Fairfax Financial Holdings’ Stake Value: $23,669,000

Percentage of Prem Watsa’s Fairfax Financial Holdings’ 13F Portfolio: 0.75%

Number of Hedge Funds as of December 31: 83

Pfizer Inc. (NYSE:PFE), a New York-based pharmaceutical and biotechnology corporation, has been at the forefront of the COVID-19 pandemic due to its Pfizer-BioNTech vaccine. Pfizer Inc. became a constituent of Fairfax Financial Holdings in Q4 2020.

Since September 2020, the stock price of Pfizer Inc. has increased by over 53.98%, as opposed to the S&P 500 Index’s rise of 29.75% during the same period. Pfizer Inc. is currently working on making children between five to 11 years old eligible for the booster dose of the vaccine. A study revealed a six times rise in antibody levels against the original variant of the virus one month after the first dose of the booster was received. Pfizer intends to use the findings of this research to ask the Food and Drug Administration (FDA) for emergency approval of the COVID-19 vaccine booster dose. The approval would make 28 million children eligible for the booster dose.

ClearBridge Investments shared its stance on Pfizer Inc. in its Q4 2021 investor letter. Here’s what the investment management firm said:

“While the level of general turnover abated as we progressed through 2021, it remained high in one area: post-COVID-19 recovery plays. The concept behind this investment thesis was, and still is, straightforward: with the advent of effective vaccines, the path from pandemic to endemic is just a matter of time. As this transition occurs, the estimated excess savings of over $2 trillion built up on U.S. consumer balance sheets will unlock dramatic pent-up demand for experiences, especially global travel. This investment case seemed especially compelling when the Pfizer vaccine positively surprised markets in November 2020. As a result, we made post-COVID-19 stocks (which were trading well below our estimate of recovery value) a sizable theme within the portfolio. We understood this to be a more aggressive tilt in positioning because it required a major improvement in demand to catalyze fundamentals and drive price toward higher business values. While we accepted that recovery would not be smooth and that it would take time to deploy vaccines both domestically and globally, we decided that recovery was the logical path of least resistance and we were being well compensated for these risks.

What we did not account for, however, was vaccine hesitancy and the risk of further infection waves. As a result, the first variant wave, Delta, was a negative surprise to both the market and our team. When the risk surfaced, we immediately updated our probability-driven models and debated how we should react. The resulting conclusion was that the recovery would be delayed and that we should reduce our exposure quickly, subsequently targeting the most aggressive recovery stocks such as cruise lines. We again acted swiftly and decisively to the positive surprise that Pfizer had delivered a high-efficacy antiviral COVID-19 pill. This pill should greatly reduce COVID-19 severity risks globally, increasing the probability of a global travel recovery in 2022. While this is still true, the emergence of the highly mutated Omicron variant set off another infection wave which spurred us to again act quickly and further reduce our risk exposure. This back-and-forth may sound exhausting, but it highlights our compulsion to act if we determine a surprise has a large enough impact on the probabilities that power our valuation-driven investment cases.

Of the 924 hedge funds in Insider Monkey’s database, 83 reported owning a stake in Pfizer Inc. at the end of Q4 2021.

9. H&R Block, Inc. (NYSE:HRB)

Prem Watsa’s Fairfax Financial Holdings’ Stake Value: $26,408,000

Percentage of Prem Watsa’s Fairfax Financial Holdings’ 13F Portfolio: 0.84%

Number of Hedge Funds as of December 31: 29

H&R Block, Inc. is a tax preparation company based out of Kansas City, Missouri. The company operates in the US, Canada, and Australia and has nearly 12,000 retail tax offices globally.

On April 5, H&R Block, Inc. made a major announcement stating that Jill Cress will become a part of the company as Chief Marketing and Experience Officer from May 2. Cress has previously gained considerable experience through leading PayPal Holdings, Inc. (NASDAQ:PYPL) as Vice President of Brand Marketing. During her tenure, she revamped the brand strategy for the PayPal and Venmo brands. She has also led the marketing function for National Geographic and Mastercard Incorporated (NYSE:MA).

For Q2 2022, H&R Block, Inc. posted an EPS of -$1.02, beating the consensus estimate by $0.21. Furthermore, the company also surpassed the revenue estimates by $514K. H&R Block, Inc. became a part of Prem Watsa’s portfolio in Q1 2021. Since January 2021, the stock price has recorded a gain of over 68.6%, outperforming the S&P 500 Index.

Apart from H&R Block, Inc., popular companies like Alibaba Group Holding Limited, BlackBerry Limited, and Atlas Corp. are also a part of Prem Watsa’s Q4 portfolio.

8. Franklin Resources, Inc. (NYSE:BEN)

Prem Watsa’s Fairfax Financial Holdings’ Stake Value: $33,470,000

Percentage of Prem Watsa’s Fairfax Financial Holdings’ 13F Portfolio: 1.07%

Number of Hedge Funds as of December 31: 29

Franklin Resources, Inc. (NYSE:BEN) is the world’s biggest provider of investment advisory services to financial institutions like mutual funds, retirement funds, and separate accounts investors. The San Mateo, California-based asset management company indulges in global equity, global institutional and municipal fixed income instruments, money funds, alternative investments, and hedge funds.

Franklin Resources, Inc. is a member of the Dividend Aristocrat list. This list comprises companies that have increased their dividends for the past 25 consecutive years. To be on this list after the COVID-19 pandemic is a significant achievement as most members were forced to either maintain or slash their dividends, resulting in them losing the membership. Franklin Resources, Inc.’s (NYSE:BEN) forward dividend yield stands at 4.2% as of April 17. Furthermore, the payout ratio stands at a conservative level of 30%. The stock is currently trading at a low forward P/E multiple of 7.5x. The high dividend yield and the low forward P/E multiple makes it an attractive stock in Prem Watsa’s portfolio.

At the end of Q4 2021, 29 hedge funds held a stake in Franklin Resources, Inc., with a cumulative value of over $401 million.

7. Alphabet Inc. (NASDAQ:GOOG)

Prem Watsa’s Fairfax Financial Holdings’ Stake Value: $48,470,000

Percentage of Prem Watsa’s Fairfax Financial Holdings’ 13F Portfolio: 1.55%

Number of Hedge Funds as of December 31: 158

Alphabet Inc. (NASDAQ:GOOG) is a Mountain View, California-based technology conglomerate holding company that is the parent company of Google and various other subsidies. Alphabet Inc.’s CEO, Sundar Pichai, revealed on April 13 that the company intends to invest $9.5 billion across its offices and data centers in the US. The investment is expected to create 12,000 new full-time jobs by the end of 2022.

Alphabet Inc. became a part of Fairfax Financial Holdings’ portfolio in Q1 2020. Since January 1, 2020, the stock price of Alphabet Inc. has rocketed over 87% as opposed to the S&P 500 Index rise of 37.4% during the same period. In a report issued to investors on April 13, Thomas Champion at Piper Sandler commented that in the checks, the commentary on Google was ‘most positive’ ahead of its Q1 2022 earnings.

Baron Opportunity Fund discussed its stance on Alphabet Inc. in its Q4 2021 investor letter. Here’s what the asset management firm said:

“Alphabet Inc. is the parent company of Google, the world’s largest search and online advertising company. It also houses a market-leading cloud business. Shares outperformed in the quarter after Alphabet reported solid results across the board, with overall revenues growing 41%, driven by an outperformance in search and YouTube. The growth in YouTube was especially encouraging given near-term concerns about advertising trends. Overall operating profit also grew an impressive 88%, demonstrating meaningful improvements in cost controls. Management emphasized that AR/VR (artificial and virtual reality) will be an exciting part of the future and they are investing in hardware and tech to support that vision. Long term, we believe Alphabet is exposed to an array of upside optionality across a diverse range of secular growth tailwinds, including digital media consumption, cloud computing, local commerce, gaming, AR/VR, and selfdriving.”

6. Crescent Capital BDC, Inc. (NASDAQ:CCAP)

Prem Watsa’s Fairfax Financial Holdings’ Stake Value: $58,766,000

Percentage of Prem Watsa’s Fairfax Financial Holdings’ 13F Portfolio: 1.88%

Number of Hedge Funds as of December 31: 7

Crescent Capital BDC, Inc. (NASDAQ:CCAP) is a business development corporation that is focused on generating and investing in the debt of private US middle-market entities. The Los Angeles, California-based company is a global credit investment manager with nearly $28 billion in assets under management (AUM). Crescent Capital BDC, Inc. has offices in New York, London, and Boston and has a headcount of over 175 employees.

Prem Watsa’s Fairfax Financial Holdings has a stake worth over $58 million in Crescent Capital BDC, Inc. as of Q4 2021. The stake was initiated in Q1 2020 with over 3 million shares.

On March 7, Finian O’Shea at Wells Fargo initiated coverage on Crescent Capital BDC, Inc. stock with an Overweight rating and a price target of $19.50. Overall, 7 hedge funds reported owning a stake in Crescent Capital BDC, Inc. at the end of Q4 2021, up from 3 in the preceding quarter.

In addition to Crescent Capital BDC, Inc., Alibaba Group Holding Limited, BlackBerry Limited, Atlas Corp. is also among the stocks on Prem Watsa’s watchlist.

5. Micron Technology, Inc. (NASDAQ:MU)

Prem Watsa’s Fairfax Financial Holdings’ Stake Value: $64,271,000

Percentage of Prem Watsa’s Fairfax Financial Holdings’ 13F Portfolio: 2.05%

Number of Hedge Funds as of December 31: 83

Micron Technology, Inc. (NASDAQ:MU) is a Boise, Idaho-based designer, manufacturer, and seller of memory and storage devices globally. Prem Watsa’s Fairfax Financial Holdings initiated a position in the stock in Q4 2018 with 48,000 shares.

Micron Technology, Inc. recorded an EPS of $2.14 in Q2 2022, beating the analysts’ estimates of $1.98. The company also managed to beat the revenue estimates for the quarter by $241.85 million. Going forward, the analysts have a ‘positive stance’ on Micron Technology, Inc. stock, as stated by JJ Park at JPMorgan in a note issued to investors on April 5. The analyst anticipates the NAND market to grow by 35% YoY, which will offset the impact of a 3% decline in ASP.

Hazelton Capital Partners discussed its stance on Micron Technology, Inc. in its Q3 2021 investor letter. Here’s what the firm said:

“It’s hard to explain how shares of Micron Technology, manufacture of DRAM and NAND semiconductor chips, can fall during a global chip shortage. In most industries, focusing on demand can give you a clear insight into what lays ahead for a company. Today, the memory and storage chip industry is no different. However, in the past, companies focused on market share led to the reckless build out of chip fabrication plants (FABs), oversupply, falling average selling prices (ASPs) of memory and storage chips, lower margins, and declining cash flows. As the industry consolidated – there are now just 3 major producers of DRAM and 5 on the NAND side – rational behavior among the key players began to take hold as competitors began focusing more on R&D. Currently, chip pricing remains cyclical although less so than in the past and that cyclicality has a long-term upward bias. The ongoing transition to newer and more robust platforms (3D 176-layer NAND & 1-Alpha node DRAM) has provided the memory and storage chip industry with improved supply capacity under its current manufacturing footprint, ultimately pressuring ASPs. Over the past three years, as most of the large platform conversions have already taken place, being able to add more bits per wafer has reached a saturation point. With no major FAB build outs planned in the near-term by competitors Samsung or SK Hynix, constrained supply and flattening cost curves should lead to durable and upward sloping ASPs once the recent volatility from the chip shortage subsides.

Currently Micron Technology trades at just 8x 2022 estimate earnings. MU is expecting growth in both DRAM and NAND not just from the supply of more chips to data centers, artificial intelligence, the auto sector, and mobile devices, but also from greater demand for gigabyte capacity per unit within those segments. With a healthy balance sheet, improving return on invested capital, and expanding cash flows, not only should Micron benefit from improving future earnings but its multiple should also reflect the transition to a flattening cost curve.”

Out of the 924 hedge funds in Insider Monkey’s database, 83 reported owning a stake in Micron Technology, Inc. at the end of Q4 2021.

4. Kennedy-Wilson Holdings, Inc. (NYSE:KW)

Prem Watsa’s Fairfax Financial Holdings’ Stake Value: $318,130,000

Percentage of Prem Watsa’s Fairfax Financial Holdings’ 13F Portfolio: 10.19%

Number of Hedge Funds as of December 31: 14

Kennedy-Wilson Holdings, Inc. (NYSE:KW) is a Beverly Hills, California-based real estate investment company that operates and invests in real estate of its own and through an investment management platform. The company focuses on multifamily office properties located in the Western US, UK, and Ireland.

Kennedy-Wilson Holdings, Inc. has 12 global offices across Europe and the US. Fairfax Financial Holdings initiated a major stake in the company in Q2 2015, and as of Q4 2021, Fairfax Financial Holdings’ stake in the company is at the highest point with over 13.32 million shares. The current value of the stake is equivalent to 9.74% of the total market capitalization of Kennedy-Wilson Holdings, Inc..

The company is a beneficiary of the increasing rents across the US. As the work-from-culture has gained momentum during the pandemic, some cities have seen a rental boom, with rents in these areas being significantly higher than in the pre-pandemic period. One such example is Boise, Idaho, where rents have increased by 39% since the start of the pandemic.

Out of the 924 hedge funds being tracked by Insider Monkey, 14 held a stake in Kennedy-Wilson Holdings, Inc. at the end of Q4 2021.

3. BlackBerry Limited (NYSE:BB)

Prem Watsa’s Fairfax Financial Holdings’ Stake Value: $436,876,000

Percentage of Prem Watsa’s Fairfax Financial Holdings’ 13F Portfolio: 13.99%

Number of Hedge Funds as of December 31: 15

BlackBerry Limited is a Canada-based provider of cybersecurity software and services to other corporations and governments globally. The company posted Q4 2021 results on March 31. Revenue was reported at $185 million as opposed to the consensus estimate of $208 million. Moreover, BlackBerry Limited was able to outperform the loss per share estimate of 3 cents by reporting a profit per share of 1 cent. T. Michael Walkley at Canaccord termed the Q4 results as inline but highlighted that BlackBerry Limited provided weak guidance for 2023. The analyst has given a Hold rating with a target price of $7. The target price reflects a potential upside of around 4.8% from the last closing price.

Prem Watsa’s Fairfax Financial Holdings has kept a stake in BlackBerry Limited since Q3 2013. Currently, the billionaire’s $436.8 million investment is equivalent to 11.3% of the whole company.

2. Resolute Forest Products Inc. (NYSE:RFP)

Prem Watsa’s Fairfax Financial Holdings’ Stake Value: $465,249,000

Percentage of Prem Watsa’s Fairfax Financial Holdings’ 13F Portfolio: 14.9%

Number of Hedge Funds as of December 31: 15

Resolute Forest Products Inc. (NYSE:RFP) is a Montreal, Canada-based paper and pulp company. It was established in 2007 following the merger of Bowater and Abitibi-Consolidated. Resolute Forest Products Inc. primarily operates in Canada, the US, and Mexico. Prem Watsa’s Fairfax Financial Holdings’ stake in Resolute Forest Products Inc. is equivalent to 47.6% of the company’s current market value.

According to analysts, the financial position of Resolute Forest Products Inc. has been the most stable in the past decade in terms of strong liquidity, leverage, and resource utilization. However, the company is expected to face significant headwinds this year due to rising inflation in commodity prices.

As of Q4 2021, 15 hedge funds held a stake worth over $574 million in Resolute Forest Products Inc..

1. Atlas Corp. (NYSE:ATCO)

Prem Watsa’s Fairfax Financial Holdings’ Stake Value: $1,416,840,000

Percentage of Prem Watsa’s Fairfax Financial Holdings’ 13F Portfolio: 45.4%

Number of Hedge Funds as of December 31: 15

Atlas Corp. is a London, UK-based asset management company that targets infrastructure assets in the maritime sector, energy sector, and other infrastructure-related sectors. The company has two main portfolio companies, namely Seaspan Corporation and APR Energy. Atlas Corp. deploys capital in such projects to generate healthy returns for its shareholders.

Fairfax Financial Holdings initiated a position in the company in Q1 2020, and its stake currently stands at around 39.6% of the outstanding shares. The hedge fund revealed that it plans to double down further by exercising warrants to purchase 25 million common shares of Atlas Corp. at an exercise price of $8.05 per share. This would generate over $201.25 million for Atlas Corp, which will be used to repay debt and for other corporate purposes. Following this development, Fairfax Financial Holdings’ total stake in Atlas Corp. will rise to roughly 125 million shares, equivalent to 45.1% of the issued and outstanding common stock of Atlas Corp..

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