Gainsco (OTCMKTS:GANS) versus Fairfax Financial (OTCMKTS:FRFHF) Critical Survey

Fairfax Financial (OTCMKTS:FRFHF) and Gainsco (OTCMKTS:GANS) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, dividends and profitability.

Analyst Ratings

This is a summary of recent recommendations for Fairfax Financial and Gainsco, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fairfax Financial	0	3	3	0	2.50
Gainsco	0	0	0	0	0.00

Given Gainsco’s higher probable upside, analysts plainly believe Gainsco is more favorable than Fairfax Financial.

Profitability

This table compares Fairfax Financial and Gainsco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fairfax Financial	15.10%	16.29%	4.58%
Gainsco	N/A	N/A	N/A

Earnings & Valuation

This table compares Fairfax Financial and Gainsco”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fairfax Financial	$31.60 billion	1.17	$4.77 billion	$213.92	7.94
Gainsco	N/A	N/A	N/A	N/A	N/A

Fairfax Financial has higher revenue and earnings than Gainsco.

Insider and Institutional Ownership

10.4% of Fairfax Financial shares are held by institutional investors. 73.5% of Gainsco shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Fairfax Financial beats Gainsco on 7 of the 9 factors compared between the two stocks.

About Fairfax Financial

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. The company operates through Property and Casualty Insurance and Reinsurance, Life insurance and Run-off, and Non-Insurance Companies segments. It insures against losses to property from fire, explosion, earthquake, windstorm, flood, terrorism, boiler explosion, machinery breakdown, and construction defects, as well as underwrites automobile, commercial and personal property, and crop insurance. The company also offers workers' compensation, automobile, employer's liability, accident and health, medical malpractice, professional liability, and umbrella coverage insurance products; marine, aerospace, surety risk, and other risks and liabilities insurance products; and reinsurance products. In addition, it franchises, owns, and operates restaurants; retails sports lifestyle products; provides integrated travel and travel-related financial services, as well as advanced digital tools for agriculture; owns and operates holiday resorts; originates, processes, and distributes value-added pulses and staple foods; develops, manages, and invests in hospitality real estate. The company was formerly known as Markel Financial Holdings Limited and changed its name to Fairfax Financial Holdings Limited in 1987. Fairfax Financial Holdings Limited was incorporated in 1951 and is headquartered in Toronto, Canada.

About Gainsco

GAINSCO, Inc. operates as a property and casualty insurance holding company. The company offers non-standard personal auto products, including coverage for third party liability, bodily injury, and physical damage, as well as collision and coverage for theft, physical damage, and other perils for an insured's vehicle. It is also involved in automotive sales and service, auto racing, and investment activities. The company offers its automobile insurance products under the GAINSCO Auto Insurance brand through independent partner agents and Website comparison shopping places. GAINSCO, Inc. was founded in 1978 and is based in Dallas, Texas.