Author Topic: Markel Results  (Read 5024 times)

misterstockwell

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Markel Results
« on: February 02, 2009, 02:59:57 PM »
Someone tell me again why Markel deserves a premium multiple?


Crip1

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Re: Markel Results
« Reply #1 on: February 02, 2009, 03:13:27 PM »
Uh...this is my #2 holding but...WOW...I am stunned.

Just a quick skim and this is really bad.

Parsad

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Re: Markel Results
« Reply #2 on: February 02, 2009, 04:18:17 PM »
I think the investment losses were somewhat expected.  They had about $1.4B in equity investments at September 30, 2008.  It didn't look like they had alot of hedges.  Wipe out about 30% from that $1.4B and you get about $500M in mark-to-market investment losses.  There weren't too many insurers like Fairfax...hell, there weren't too many companies like Fairfax out there with their hedged positions and CDS portfolio.  Even Berkshire will get sideswiped when their report comes out.  Cheers!
No man is a failure who has friends!

oldye

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Re: Markel Results
« Reply #3 on: February 02, 2009, 04:33:47 PM »
Probably better than what we'll see industry wide as the numbers start to come out

Uccmal

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Re: Markel Results
« Reply #4 on: February 02, 2009, 05:15:26 PM »
Those results are dismal.  It looks like they took a hit on actual sales of investments as well.

I dont get this comment:  These guys hold FFH and invest beside them from time to time:

Alan I. Kirshner, Chairman and Chief Executive Officer, commented, "At this time last year, it would have been almost impossible to predict the significant deterioration in general economic conditions and considerable dislocation of the global financial markets that we have experienced in 2008.
GARP tending toward value

Partner24

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Re: Markel Results
« Reply #5 on: February 03, 2009, 06:44:55 AM »
"Someone tell me again why Markel deserves a premium multiple?"

Because it has a great long term track record of book value per share CAGR and because you don't value a business only by using it's last year financial results...;

Because it is more likely to have it's reserves stated too much conservatively than the contrary;

Because it has an investment leverage to equity of more than 3 and it's float has so far been at no cost overall.


misterstockwell

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Re: Markel Results
« Reply #6 on: February 03, 2009, 07:10:12 AM »
In their own words:

Book value per common share outstanding decreased 16% to $222.20 at December 31, 2008 from $265.26 at December 31, 2007. Over the five-year period ended December 31, 2008, compound annual growth in book value per common share outstanding was 10%.

There is nothing great about that 5 year growth in book value.

Partner24

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Re: Markel Results
« Reply #7 on: February 03, 2009, 07:29:20 AM »
Well, 5 years is not enough, and even if it was, given the actual condition of the industry, 10% CAGR over the last 5 years is great.

And if I take the long term view, over it's last 20 years, MKL book value per share went from 9.22$ to 222,20$.

And finally, since it is where the puck is going to be that interest me most, I think that Markel is well positionned to thrive when the insurance market will finally begin to harden more significantly.

 


Crip1

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Re: Markel Results
« Reply #8 on: February 03, 2009, 07:36:28 AM »
"There is nothing great about that 5 year growth in book value."

True, 10% per annum over 5 years is not legendary, but it makes sense to frame this properly and consider that this 5 year period includes a worldwide financial meltdown and the costliest hurricane ever. It will be interesting to see how MKL stands up in comparison to the Berkshires, Chubbs, etc, of the world.

Interestingly enough, if Fairfax ends up with a BV of $310 for Y/E 2008, they will also have acheived a BV CAGR of 10% per annum.

Trust me, I am disappointed in the results, but thinking that the folks over at Markel have gotten stupid all of a sudden does not make sense to me.

-Crip

dcollon

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Re: Markel Results
« Reply #9 on: February 03, 2009, 07:40:50 AM »
I would take some time to review the operating results.  The Q4 results are interesting and don't appear as bad as some have suggested.  However, I can understand the frustration about multiples/valuations.