Author Topic: MKL - Markel Corp  (Read 363563 times)

Xerxes

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Re: MKL - Markel Corp
« Reply #800 on: November 04, 2020, 06:52:12 PM »
Here are some excerpt that i found interesting in the call:
Impressive ain't it. What a non-insurance operating business they built within Markel in a span of 5 years !

"Revenues from Markel Ventures surpassed $2 billion through the first nine months of 2020, compared to $1.6 billion last year. This increase reflects the contribution of revenues from our recent acquisition of Lansing Building Products, which we completed in late April, and the acquisition of VSC Fire & Security, which closed during the fourth quarter of 2019. Excluding the contributions of Lansing and VSC in 2020, operating revenues in our Markel Ventures operations decreased compared to 2019 as a result of decreased demand attributed to the economics of social disruption caused by the COVID-19 pandemic."

"EBITDA from Markel Ventures was $284 million for the first nine months of 2020, compared to $219 million last year, reflecting the contribution of Lansing and VSC, as well as growth and improved operating results at certain of our businesses. Looking at our consolidated results for the year. Our effective tax rate for the first nine months of 2020 was not meaningful due to the small pre-tax loss in the period. The effective tax rate was 22% for the nine months ended September 30, 2019."

"For your reference, I checked my notes from the third quarter year-to-date conference call from five years ago in 2015. In that year, we reported revenues from Markel Ventures of $784 million for the first nine months and EBITDA of $76 million. I don't remember the exact economic circumstances and conditions of 2015, but I'm pretty sure it didn't include dealing with the worldwide pandemic. Our efforts to build an enduring and resilient system at Markel continue to unfold."



Xerxes

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Re: MKL - Markel Corp
« Reply #801 on: November 04, 2020, 07:03:48 PM »
Q3 Net investment gain/loss $539 million
Q3 Markel Venture $824 million top line

Q2 Net investment gain/loss $911 million
Q2 Markel Venture $678 million top line

Q1 Net investment gain/loss ($1.7 billion)
Q1 Markel Venture $511 million top line

Net investment gain/loss through Q3 = ($230 million)

From the conference call on buy-backs:

Unknown speaker

Hello, gentlemen. I have a why-not instead of a but-for. Ventures has been facing horrific conditions, whether they're fires or storms or COVID, and yet you have maintained and grown the equity of the company during this horrific period. Over my many decades in this business, I've seen many companies that had share repurchase plans, not buy, when the price was low but buy when the price was high.

I know you're very attuned to value when you make that decision. But if the skies are not perfectly blue now, but it seems like you are envisioning times when they're going to get a lot bluer than they are currently. The pricing is good. Ventures is doing well.

You feel good about all the insurance arms. Why not take the handcuffs off the statement that you're not open to buying shares back today? You've got cash, I believe, of $4.5 billion, I've never seen. If that's correct. I haven't seen that ratio to value of the company in your history.

Why wait for the last cloud to clear to have the ability to pull the trigger if you choose to do so? It doesn't mean you have to in the last quarter of the year, but you would have told the market that you want to have that arrow back in your quiver, and you may or may not use it.

Tom Gayner -- Co-Chief Executive Officer

Right. Charles, this is Tom. Thanks for the question. And really, the long tent in the pole from my point of view is the regulatory and rating agency environment that we continue to need to be sensitive to.

So in the environment which we continue to be in, the current growth rate of what we're experiencing in our Insurance business has regulators and rating agencies being very particular about the amount of capital we have and the form in which it is held. So we continue to work with them to try to make them as comfortable as we possibly can, and that's an ongoing process. And at the point where the growth rate slows down a little bit, that will actually free up sort of the regulatory capital and rating agency capital that we need to be sensitive to for the Insurance business. But other than that, I agree with everything you said.

Unknown speaker

Well, then the other signal would be insiders should consider doing heavy buying since they see things going so well.

Tom Gayner -- Co-Chief Executive Officer

From your mouth to God's ear.

Unknown speaker

Just give me the phone call. I can make it happen.


chrispy

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Re: MKL - Markel Corp
« Reply #802 on: November 05, 2020, 02:58:35 AM »
Great back and forth - thanks for sharing.

I do not see MKL being particularly cheap with rates as low as they are and their inability to grow book value the past few years. Akre, who used to speak quite favorably about MKL, has been allowing the stake of MKL in his fund to decrease quite a bit over the recent years by never buying more while AUM increases.

CorpRaider

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Re: MKL - Markel Corp
« Reply #803 on: November 05, 2020, 07:32:32 PM »
They could stop the insider selling first.  Looks like $7MM in sells over the last year (Mostly Richie Whit and the Markel boys) and ~$800K in purchases from one director.

ValueMaven

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Re: MKL - Markel Corp
« Reply #804 on: December 29, 2020, 07:58:36 AM »
P/BV has compressed and is now 1.25x - modest underwriting losses and lower rates for their fixed-income sleeve have hurt.  The question is - is this structural, or a good time to get in to what many consider to be a mini-Berkshire.  'In His Image' from 2008 is a great article on Markel trying to mirror Berkshire. 

clutch

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Re: MKL - Markel Corp
« Reply #805 on: December 29, 2020, 10:05:42 AM »
P/BV has compressed and is now 1.25x - modest underwriting losses and lower rates for their fixed-income sleeve have hurt.  The question is - is this structural, or a good time to get in to what many consider to be a mini-Berkshire.  'In His Image' from 2008 is a great article on Markel trying to mirror Berkshire.

But mirror Berkshire of when... you don't want to mirror an underperforming stock.

Xerxes

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Re: MKL - Markel Corp
« Reply #806 on: January 17, 2021, 06:07:43 PM »
Discussion with Tom Gayner of Markel on a Podcast.
I found the second 30 min of the podcast super interesting.

https://www.listennotes.com/podcasts/we-study/tip332-long-term-investing-w--V9GLC_Dgbp/

nwoodman

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Re: MKL - Markel Corp
« Reply #807 on: January 17, 2021, 11:30:17 PM »
Discussion with Tom Gayner of Markel on a Podcast.
I found the second 30 min of the podcast super interesting.

https://www.listennotes.com/podcasts/we-study/tip332-long-term-investing-w--V9GLC_Dgbp/

Thanks, it was a good interview. Tom Gayner’s integrity shines through. Not bad value at the current price IMHO.  It was a line ball between BRK and MKL, I opted for a bit of diversification. They should both do OK (10-12%) compounding from these levels.  Set and forget

cheers
nwoodman
« Last Edit: January 18, 2021, 12:13:30 AM by nwoodman »

Spekulatius

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Re: MKL - Markel Corp
« Reply #808 on: January 27, 2021, 04:22:47 PM »
Discussion with Tom Gayner of Markel on a Podcast.
I found the second 30 min of the podcast super interesting.

https://www.listennotes.com/podcasts/we-study/tip332-long-term-investing-w--V9GLC_Dgbp/

Thanks, it was a good interview. Tom Gaynerís integrity shines through. Not bad value at the current price IMHO.  It was a line ball between BRK and MKL, I opted for a bit of diversification. They should both do OK (10-12%) compounding from these levels.  Set and forget

cheers
nwoodman

How do you get 10-12% from here? They have compounded book value at 8% CAGR in the last 5 years and with interest rates being low, I donít see much more than that going forward Even worse, they take a lot of equity risk compared to other insurers. Assuming an 8% CAGR gain in book value, MKL is worth about book, but not more, imo.
Life is too short for cheap beer and wine.

Ismael

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Re: MKL - Markel Corp
« Reply #809 on: January 28, 2021, 08:48:56 PM »
Discussion with Tom Gayner of Markel on a Podcast.
I found the second 30 min of the podcast super interesting.

https://www.listennotes.com/podcasts/we-study/tip332-long-term-investing-w--V9GLC_Dgbp/

Thanks, it was a good interview. Tom Gaynerís integrity shines through. Not bad value at the current price IMHO.  It was a line ball between BRK and MKL, I opted for a bit of diversification. They should both do OK (10-12%) compounding from these levels.  Set and forget

cheers
nwoodman

How do you get 10-12% from here? They have compounded book value at 8% CAGR in the last 5 years and with interest rates being low, I donít see much more than that going forward Even worse, they take a lot of equity risk compared to other insurers. Assuming an 8% CAGR gain in book value, MKL is worth about book, but not more, imo.

Isn't the 8% CAGR the result of problems with reinsurance and ILS acquisitions?  Do you think they will continue to have problems with these subs?  Low interest rates isn't a very compelling argument to be bearish on the stock.