E-L Financial Corporation Limited (ELF.to) is traded on the TSX. It is thinly traded because the majority of the shares are held by one of Canada's wealthiest families. Furthermore, shares trade at $680 as I compose this article.

I am in agreement with management that shares are currently undervalued.

An announcement was made March 4, 2020 that during the 12-month period commencing March 9, 2020 and ending March 8, 2021, the intent is to purchase up to 200,970 common shares  being approximately 5% of the total number of 4,019,409 shares outstanding as at March 2, 2020.


  • Majority ownership is held by the Jackman family, one of Canada’s top 100 wealthiest families.
  • This company has generated a 12.5% compound annual growth in net equity value since inception (1969).
  • Management views shares as being undervalued and announced the intent to purchase shares as noted above.

NOTE: The patriarch  of the Jackman family is Hal Jackman.


We certainly are living in interesting times!

Throughout history, there have been a number of pandemic diseases such as smallpox and tuberculosis. One of the most devastating pandemics was the Black Death (also known as The Plague), which killed an estimated 75 - 200 million people in the 14th century. We have also had the 1918 influenza pandemic (Spanish flu), the 2009 influenza pandemic (H1N1), and we now have HIV/AIDS and COVID-19 pandemics. Regrettably, it is not until we get a pandemic that many suddenly realize they were not properly prepared from a financial perspective.

I am not a financial expert and on this blog I merely share what my wife/I did so as to not have ANY financial worries during a time of crisis.

I started my banking career at one of Canada’s Schedule A banks in Calgary, Alberta in July 1980 and worked for that bank in various positions until August 1984 at which time I returned to university to complete my 'Must Begin Again' degree (MBA).

I know it will appear that I am exaggerating but I am being perfectly honest when I say that it was on my walk home after my very first day of full-time employment that I made a decision that I would not work until the ‘typical’ retirement timeframe of 60 – 65.

Although I enjoyed the vast majority of my time in my banking career and truly had the pleasure of working with so many wonderful people, I have absolutely no regrets that I put a plan in motion when I was in my 20s to extricate myself from the workforce much sooner than the typical retirement timeframe.

As soon as I started full-time employment, I made a decision to spend considerably less than my take home pay. It was not my intent for my lifestyle to keep up with any growth in my employment income.

Fortunately, when I got married my wife was on the same page and over the years we invested in high quality companies. Our investments have appreciated considerably in value and they generate reliable dividend income which increases at a rate which exceeds the rate of inflation.

Sure, I made some poor investment decisions over the years…such as exiting positions rather than holding for the long-term and, on the rare occasion, speculating in a ‘dud’; in 2017 and 2018 I shared some of my experiences in articles which can be accessed here. For the most part, however, things have worked out pretty well which allowed us to retire at 52 (wife) and 56 (me); both ages are a bit later than what I had planned.

Fast forward to the present day and I can honestly say I have no regrets about my decision many years ago to invest in high quality companies. Although nothing is for certain, I am reasonably confident the companies in which we have exposure will not cut their dividend (I do not deny a dividend freeze is totally out of the realm of possibility). Should there be any dividend cut, I am reasonably confident the portfolio is appropriately balanced such that a dividend cut will have an immaterial impact to our cashflow.

FFJ Portfolio

The holdings within the FFJ Portfolio can be accessed here and the cashflow generated from the holdings within the FFJ Portfolio can be accessed here. In addition to the holdings within the FFJ Portfolio we have a larger portfolio for which I do not disclose details. The holdings within the undisclosed portfolio are also shares of high quality companies; I do not invest in debt instruments.

E-L Financial Corporation Limited

One of the holdings within one of the several ‘side’ accounts within the FFJ Portfolio is E-L Financial Corporation Limited (ELF.to).

The current share price is well below the $832 I paid when I initiated my position but I am not concerned since I have no intention of selling any shares.

In reviewing the company’s December 31, 2019 Financial statements, I come away with the opinion that the share price understates the value of the company. Go to page 10 of 104 where you will see the growth in the company’s net value from $747.48 in 2010 to $1486.19 in 2019 and then look at how the company’s share price has performed from December 31, 2009 to December 31, 2019! As I compose this article ELF.to is trading at $680.

Although ELF.to’s Net Equity Value (NEV) has increased subsequent to me initiating a position, ELF.to’s share price is ~18% lower than my average cost (~$832/share versus the current $680/share). It just does not seem reasonable to me that ELF’s share price is $680 yet as at December 31, 2019 the NEV was $1486.19/share. I can not imagine that ELF.to's NEV has dropped ~$806 (the difference between the FYE NEV and the current share price). We are living in challenging times but things would have had to go terribly wrong for ELF.to’s NEV to drop to the current $680 share price. I don’t think this is the case.

In my August 11, 2018 article I concluded with:

‘I recognize ELF is very different from the companies I typically analyze and it may hold little appeal to you. I suggest, however, that you not merely cast aside this company in the ‘not interested’ pile of companies.

In my opinion, an investment in ELF provides you with the opportunity to benefit from investments for which the typical retail investor would likely be unable to make.

The Jackman family’s wealth is heavily dependent on the performance of the companies within the ELF family of companies. Given this, I strongly suspect investment decisions are made with the long-term in mind; the Jackmans are in a position where they don’t have to be concerned as to the investment community’s questions regarding quarterly financial results.

I suggest you view an investment in ELF much like you would an investment in Berkshire Hathaway (NYSE: BRK.a and BRK.b). This would be one of those investments you acquire, tuck away, rarely look at, and then several years later you look at the share price and go ‘OMG!’….in a positive way.’

I fully appreciatethe company’s share price is far lower than when I wrote that article but keep in mind company’s share price does not always reflect a company’s true value.

In my opinion, management is correct with its decision to acquire shares on the open market since the share price very likely does not accurately reflect the company’s current true value.

I am all for high quality companies buying back shares when they are undervalued (ie. ELF.to)! This has certainly not been the case for many companies over the last few years. In fact, countless articles have been written over the past few years in which members of the investment community have expressed concern that companies were repurchasing richly valued shares with the use of debt during our low interest rate environment.

Dividend Income

If you look at my FFJ Portfolio income report you will see $551.25 in dividend income from ELF.to was received in April (April 17th to be exact). Regretfully, I can not contribute further funds this calendar year to the account in which the ELF.to shares are held and I depleted the cash in this account in mid-March to acquire additional The Royal Bank of Canada (RY.to) shares. Although I could acquire ELF.to shares in another account I am currently satisfied with my existing exposure.

Just because I do not intend to increase my ELF.to exposure does not mean you should totally exclude this company as a potential investment.

Final Thoughts

I am not pleased that the broad North American indices have come off their mid-March lows (see here, here and here) and am not about to deploy any money to acquire additional shares until such time as we get another significant broad market pullback. I do, however, have several companies set up with automatic dividend reinvestment so I know my position in some high quality companies will be increased; receipt of more dividends between now and month end is expected and I will disclose this in my month end report.

Everyone is entitled to their opinion as to what is likely to happen in the North American equity markets. I, however, am in agreement with these opinions (see here and here). I think share prices have bounced back far too much in such a short timeframe and with all the problems we have in this world I think:

  • many investors are delusional if they think current valuations are reasonable;
  • the COVID-19 issue is NOT going to be resolved in short order.

Stay safe!

I wish you much success on your journey to financial freedom.

Thanks for reading!

Note: I sincerely appreciate the time you took to read this article. Please send any feedback, corrections, or questions to [email protected].

Disclaimer: I have no knowledge of your individual circumstances and am not providing individualized advice or recommendations. I encourage you not to make any investment decision without conducting your own research and due diligence. You should also consult your financial advisor about your specific situation.

Disclosure: I am long ELF.to.

I wrote this article myself and it expresses my own opinions. I am not receiving compensation for it and have no business relationship with any company whose stock is mentioned in this article.