1. Markel Corporation (NYSE:MKL)
Number of Hedge Fund Holders: 32
Markel Corporation (NYSE:MKL) a diverse financial holding company, markets and underwrites specialty insurance products in the United States, Bermuda, the United Kingdom, the rest of Europe, Canada, the Asia Pacific, and the Middle East. Berkshire Hathaway bought Markel Corporation (NYSE:MKL) stock in the first quarter of 2022. This holding, at the end of the third quarter of 2022, was worth 647,611 shares worth of $506.99 million. This makes up 0.17 % portion of its total investment. On February 1, 2023, Markel Corporation posted its earnings for the fourth quarter, reporting earnings per share of $25.57, beating the analyst’s estimate by $7.53. The company’s revenue was $4.21B, beating the analyst’s estimate by $796.10M.
On December 22, Janney Montgomery Scott analyst Robert Farnam maintained a Buy rating on Markel (NYSE: MKL) stock and a $1,550 fair value estimate, noting that Markel’s main business involves offering specialty insurance products to niche markets that are often neglected or disregarded by other insurance companies.
Among the hedge funds being tracked by Insider Monkey, Omaha, Nebraska-based investment firm Berkshire Hathaway is a leading shareholder in Citigroup Inc. (NYSE:C) with 467,611 shares worth more than $506.99 million.
In its Q4 2022 investor letter, Giverny Capital, an asset management firm, highlighted a few stocks and Markel Corporation (NYSE:MKL) was one of them. Here is what the fund said:
“The market really punished growth stocks that stopped growing, even if only temporarily. We own several businesses with long-term track records of compounding their earnings at double-digit rates, that trade for less than 15 times consensus estimates of 2023 earnings. Our insurers Markel Corporation (NYSE:MKL) and Berkshire Hathaway also trade for about 15 times their expected 2023 operating profit after we back out the value of their large portfolios of common stocks.
Not so long ago, a PE multiple of 15x was not considered inexpensive. But the current PE multiple for the overall stock market remains 17x 2023 estimates and the risk-free rate of return on 10-year US Treasuries is below 4%. I like our inexpensive growers more than either of those alternatives.
At the top of our performance list, Progressive Corp. rose 26% for the year as it generated outstanding results relative to other large auto insurers. Markel and Berkshire Hathaway rose modestly. The three companies compete in diverse lines of insurance, but they all benefit from rising rates for property coverage after an extended period of weather catastrophes, rising jury awards in lawsuits and inflated loss costs. Our insurers tend to be careful underwriters, so their profitability rises with rates. Our insurers also benefit from rising interest rates because they tend to invest premiums paid by customers into fixed-income securities until they pay claims.”
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