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Markel Corporation (MKL)

NYSE - Nasdaq Real Time Price. Currency in USD
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1,201.92+24.34 (+2.07%)
As of 01:07PM EDT. Market open.
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  • J
    JB
    The underlying value of the equity position goes down so the book value goes down thus the price to book goes up. Some people say, “well I’m not going to buy now the p/b is over 1.2.” That doesn’t make sense. Are you going to wait for the underlying stock to go up thus book value goes up and it’s ok for you to buy even though markels share price may be higher than it is today?
  • t
    tim
    These guys have underperformed the S&P500 for more than 10 years. maybe 15 years, maybe time to sell half my shares and buy the S&P500. These guys are much smaller than BRK and should be outperforming the S&P like BRK did back 50 years ago, so maybe they aren't a young Berkshire. This is dismal performance.
  • s
    sno
    An SEC form 4 was filed a few days ago....Tom Gayner bought some MKL in the open market....whoooopeee!! He bought 50 shares at around $1,200. That ain't much of a vote of confidence. MKL sits on well over $5,000,000,00 of cash. Why isn't MKL buying back stock? And WHY does this supposed noted "value" investor Tom Gayner ignore MKL at about 1x book....but Gayner loves to own a very similar smaller insurance company to MKL......RLI Corp...and Gayner LOVES to own $135,000,000 of RLI stock - even though it trades at FIVE times....5x book.

    A TRUE value investor would do the obvious. Sell $135 million of similar to MKL... RLI, at 5x book and use $135 million to buyback MKL at just over 1x book. I've lost some respect fo Gayner.
  • s
    sno
    I've lost some respect for the vaunted Tom Gayner. Yes, it is not his fault for mark to market stock and bond losses. But it IS his fault if he does NOT HIGHLIGHT the actual true worth & book value of all MKL assets. Just look at HGTY 23% stake. That is $600 million not in the "numbers". NOR has he provided shareholder a current DISCOUNTED PRESENT VALUATION (PV) on ALL the MKL Venture companies portfolio....about $5.6 billion revenues... If Gayner gave those numbers publically to ALL investors and analysts..., I think you would NOT see MKL trading at 1x book value OR LESS. And that value is LIQUIDATION value at fire sale prices..

    So, here is a big Tom Gayner mistake.. Look at MKL stock holdings. As of March 31, MKL owned a stake in RLI Corp worth about $135 MILLION. RLI is a fine company, P&C like MKL. RLI has a large stock portfolio as well (like MKL) and bonds....BOTH of which took a book value hit recently. HOWEVER????? RLI Corp trades at FIVE TIMES....5x....book value! But Gayner let's MKL trade (if all was disclosed publically) at BOOK value or less. SOLUTION? if Gayner is a TRUE "value investor"...SELL THE RLI STOCK FOR $130 MILLION AND BUY BACK $130 MILLION of MKL shares at 1x book.

    If some takover artist or private equity firm see's what I see....then MKL is for all intents "in play" for an activist or a takeover...whether you want it or not. Gayner can't stop anyone from making an offer to get all MKL large discounted assets. It will be no ones fault but Gayner's, unless he makes a move to close the TRUE MKL VALUATION GAP.
  • G
    Grant
    So YOY revenues went up by 30% but the stock dropped? 🤔
  • R
    Russell
    I added about 10% to my shares this morning. I think MKL is undervalued. It's not a cheap as I would like, and it may get cheaper. But, I'm happy with my buy this morning.
  • R
    Robert
    I think Gaynor should be making big buys of MKL stock at this price. If he's not, that tells me it's time to go. I've held this stock forever and it consistently disappoints. It occasionally gets a head of steam - and then collapses. I don't know what's going on, but this company has not been shareholder friendly for a long, long time.
  • n
    nayan
    This is a dead stock
  • s
    sno
    @michael I bought 10 shs too in last 60 seconds....$1,167.50. But I also bought before 15 shs at $1195. My position is getting a lot bigger.

    I do think MKL mgmt will buy stock down here. I also think Buffett will too...just don't know how much. What I DO KNOW is....MKL sits on $5.9 BILLION IN CASH! That is a massive amount when you consider the WHOLE MARKET cap of MKL is about $15.9 billion!

    Next? MKL owns 23% of Hagerty (HGTY) but they only discloses it's value as $257 million, their cost. They do NOT DISCLOSE HGTY TRADES for about $850 MILLION value....SEE? MKL is HIDING $600 MILLION OF HGTY STOCK PROFIT....but MKL WROTE DOWN $1.9 BILLION OF STOCK & BOND LOSSES? WHERE IS THE $600 MILLION GAIN IN HGTY SHOWN? no where. WHY declare losses in stocks, BUT NOT DISCLOSE $600 MILLION GAINS HIDDEN???

    Next? MKL owns a bunch of small Venture companies that do great are are growing...the combined revenues add up to over $5.5 BILLION...but MKL hides AGAIN...MKL carries all theses companies at COST BASIS...what they paid for them years ago. But since then their values have increased greatly. BUT ALL WE GET IS THE ORIGINAL PURCHASE PRICE VALUATION! And THAT THEN.... KEEPS MKL's honest and real book value ------ DEPRESSED! That is why MKL is an incredible TAKEOVER target at these low prices. Someone could do that and bust the whole company into three pieces and make a $$$$ KILLING. HECK? I COULD DO IT ALMOST. How? MKL has about $8 BILLION in stocks I could sell easily and MKL SIT's ON $5.9 BILLION OF CASH I can use to fund the deal :) if I can think that way, other deal makers are too. BANKERS will too... Instigate a $20 billion takeover deal of MKL and the investment banker get's maybe 3% fee...$60,000,000 easy money....all because the market over reacted and MKL is stupid cheap :)

    Next? MKL has a fortress balance sheet. And MKL made it EVEN STRONGER by buying back and retiring about $325 million of debt in Q2!. It was a 4.9% coupon... So right of the bat MKL will be saving $15,900,000 in annual interest costs, and that goes to bottom line.

    Add all that in and you get MKL valued now about 1.1 times BOOK....similar and smaller insurance company RLI (good outfit) ...TRADES AT FIVE TIMES BOOK VALUE!!!! Five times book on MKL would be about $5,400 per share. MKL at TWO times Book is about $2,100! MKL is valued cheap at $1,167. Let's see what Buffett thinks...it is why I will still buy more as it goes down. It will stop. MKL is valued & traded as a STOCK MUTUAL FUND that got killed, and this ""Stock Mutual Fund"" also owns an insurance company and a Venture company. IN REALITY.....MKL should be valued in REVERSE - as a $10 billion insurance company that owns also a $5.5 BILLION Venture private equity company...and those two entities happen to own about $8 billion of stocks...of which about $1 BILLION IS BERKSHIRE HATHAWAY!
  • s
    sno
    MKL's single largest stock holding is AAPL.....BRK showed a $44 billion loss in Q2 because of it's stocks down hard. AAPL was one that hurt. BUT! Since JUNE 30 and AUG 6....AAPL stock is up $30....BRK owns just under 900 million shares....SO? BRK has a paper gain, so far, for this Q of $27 BILLION (in AAPL alone) which is a huge recoup of the just declared $44 billion loss.

    This reversal of fortunes in the BRK stocks will reflect positively to MKL numbers because MKL owns about $1.1 billion of BRK.A and BRK.B stock, I also think it possible BRK bought more AAPL when is was low $130's.....now $165. Maybe MKL did too.
  • R
    Robert
    Ouch! This thing is in a free fall. I don't think it's justified, but apparently the market disagrees.
  • s
    sno
    The calculations for the just released BOOK VALUE of MKL are all bogus....because MKL discloses some, but you have to dig deep.. MKL book value is NOT $898, it is MUCH much higher and no one knows it really...which is why I think MKL at these levels is takeover bait. Here's why:1. MKL owns 23% of HAGERTY.....MKL carries this investment in publically traded HGTY at the COST BASIS ...which is $256 million COST to MKL for the 23% HGTY stake. but the PUBLIC value of that 23% stake HGTY is worth $850 MILLION right now! But on MKL BOOK VALUATION THEY ONLY SAY HGTY IS WORTH $256 MILLION! Which MEANS?????? Using HGTY market value now, MKL book value is UNDERSTATED BY $600 MILLION....and that adds in an EXTRA $49 a share in book value.Next? The group of Markel Venture private companies are #$%$ VERY well.....they are on a run rate for 2022 of about $5.6 BILLION in revenue...but I believe that when MKL calculates BOOK VALUE they only declare the COST BASIS of ALL THE COMPANIES the Ventures group has bought...COST BASIS from ages ago....but now they do $5.6 billion together. MKL does not disclose these exact valuations...but if I had to guess the value of all the MKL venture companies is probably $800 million to $1 BILLION higher ....understated...I'd guess there is about $80 in book value UNDERSTATED because MKL carries it ALL AT COST BASIS, NOT MARKET VALUE.MKL is NOT worth book of $898...if you add in valuations for HGTY and Ventures companies...it is a SOLID $130 higher....or about $1,025 a share...and that will climb fast as stocks recover..MKL is a steal at this level...and MKL sits on around $5 BILLION OF CASH???? and MKL bought back and REDUCED debt outstanding by about $325 million? Bullet proof balance sheet... if I was an investment banker I'd be calling every hedge fund and private equity group I know.. MKL is too cheap and way undervalued.
  • s
    sno
    No one understands what MKL really is...I will boil it down....MKL, if you buy it, is basically an $8 billion STOCK MUTUAL FUND that is run by Tom Gayner with a very good 25 year track record. So as with any mutual fund, it goes UP or DOWN with the market. ALL MKL does is go DOWN because it's stock & bonds are marked down to market. However? This MUTUAL FUND is like no other....because the Stock Mutual Fund (MKL) also owns a multi billion insurance company that throws off tons of cash. This MKL Mutual fund also acts like a PRIVATE EQUITY Venture firm...in that this Stock Mutual Fund MKL also own a small conglomerate of private businesses - with about $5.6 BILLION in revenue.

    The fact that MKL is so destroyed just because it's "stock mutual fund" is down...is stupid. NO One is giving ANY value to the insurance company or $5.6 BILLION in MKL Ventures companies. NOR does anyone see that MKL UNDERSTATES it's HGTY 23% stake by $600 MILLION!

    IMO...MKL is in takeover territory....MKL also has $5.8 BILLION IN CASH...and MKL retired over $300 million of debt last quarter.

    This company is pristine...and all anyone values it at... is it's 'MUTUAL FUND" stocks.

    Here is ANOTHER comparable! RLI Corp...a similar insurance company like MKL and RLI has a heavy stock portfolio....BUT GET THIS! RLI trades at just under FIVE TIMES BOOK VALUE. MKL is now trading about 1.1 TIMES BOOK VALUE...and BOOK IS UNDERSTATED because NKL carries ALL Markel Ventures companies at their initial purchase price years ago!
  • d
    demetrios
    This is going to 1500
  • s
    sno
    Democrats have now passed a tax on STOCK BUYBACKS.....they will tax you 1% of what you buyback. This is slated to take effect Jan 2023...so TOM GAYNER...wake up. Buffett just disclosed his $30 BILLION undervalued book value asset. Now it's your turn. NEXT? BUY BACK stock now! First, MKL is basically trading at book value...and second...WHY pay the 1% tax on buybacks come 2023...it is a Two-Fer...MKL trades at 1x book basically and you DON'T have to pay Democrat passed 1% tax.
  • R
    Russell
    I still believe, as WB does, that the FASB decision to make companies like MKL, BRK and others, who hold the shares of publicly traded companies on their balance sheet, to show the stock price movement at profit/loss on the income statement, is a stupid rule. As WB said, it promotes serious volatility in the EPS from quarter to quarter, and it really doesn't impact "profit", it impacts the balance sheet/NAV. As we see in this report, NAV for MKL is down about 13% YTD, while revenues are up across the board, and the combined ratio is a very respectable 91%.

    IMHO, MKL is doing just fine from an operations standpoint, and the stock price will reflect that over time. Quarter to quarter, who knows what the stock price will do. I'd LOVE to see it drop to 1.0 X NAV (or less), then I would add a few shares. If not, I'll just hold.
  • R
    Russell
    Here is a link to the transcript of the CC Wednesday: https://www.fool.com/earnings/call-transcripts/2022/08/03/markel-mkl-q2-2022-earnings-call-transcript/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article

    Here are a couple of Q&A I found interesting from the CC transcript:

    Mark Dwelle -- RBC Capital Markets -- Analyst

    That's helpful color. I appreciate that. The second question is, during the quarter, you engaged in some share buybacks. It's not that you've never done those before, but it's definitely a little bit less common appearance.

    Can you just talk about how you're thinking about buybacks kind of what prompts you to get into the market? What prompts you to hang back really just a refresher because it's not something that we've seen real lately?

    Tom Gayner -- Co-Chief Executive Officer

    Sure. Mark, this is Tom. And you're correct. The pace and amount of share repurchasing we're doing is more than we've ever done at Markel before.

    And I'll talk -- again, as you say, refresher, the capital allocation, triage and philosophy here is the first thing we want to do is invest in organic opportunities in the businesses we're already in. If we've got an insurance opportunity or ventures opportunity, where we're already there, and there's the opportunity to invest capital and grow good returns with proven winners inside the tent, we're going to do that first. The second thing we would look to do is acquisitions of additional ventures or insurance companies. Third thing we would do is to purchase public equity securities.

    And the fourth thing that we would do is when we look at all those opportunities, and Markel stock meets that test of business producing good returns on capital run by management's equal measures of talent and integrity, with capital discipline at a fair price and Markel stock comes up, meeting all those four things, we're going to do that, too. And we can do all four of those things at the same time. We do them one, two, three, four but it might be the circumstance where all four are happening simultaneously. And I would say we're in one of those environments right now.

    So we're just trying to be rational and make rational decisions and what a rational decision leads me to at the moment is to say we are buying some Markel stock. So we did.

    Mark Dwelle -- RBC Capital Markets -- Analyst

    OK. That's helpful on that. And then one last question. This is, I guess, particularly for you, Tom, and it could well be that the answer will be very similar to what you just said.

    But you commented for several quarters that the pricing is very high to do acquisitions in the ventures realm. I know you've never sold a ventures unit. But should you consider being a seller? You've had many of these businesses for quite a long time. You bought them well.

    They've ripened nicely. Is there a time to harvest? Is there any -- is there ever a time to harvest? Maybe you can just talk about how you think about those.

    Tom Gayner -- Co-Chief Executive Officer

    Sure. The great news is harvest happens every day in the ongoing operations of the business and the cash flows they produce. So we're not buying things to turn around and sell them. We're buying things to operate them and build them and see them grow and produce more cash, and that's indeed what they're doing.

    We do not sell the business, and we don't look to because we think one of the features of culture and ethos that we have. And one of the reasons why people want to join Markel is because they share the dream of building something wonderful for a long period of time as well, not just trying to ring a bell and then everybody leaves and starts over somewhere else. The building of Markel is meant to be a generational thing, generation after generation. It's been three generations already.

    We're working on generation 4.0. We look forward 5.0 and 6.0, and that doesn't involve selling because harvesting doesn't need to happen from selling, harvesting happens from running a good business every day and putting the cash in the storehouse and then applying that cash to further growth opportunities.
    MKL earnings call for the period ending June 30, 2022.
    MKL earnings call for the period ending June 30, 2022.
    www.fool.com
  • M
    Michael
    this is a buy and hold for life type stock
    Bullish
  • R
    Russell
    Just fyi, Tom Gayner owns over 47,000 shares of MKL. Just sayin'. :)
  • S
    Salvatore
    Since I joined Mrs Luna Gianna I never witnessed any losse... success has so far has been my trade with her, she is really a good and expert trader and a reliable woman thanks very much Ma'ma for the honesty
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