Markel reported Q3 2016 results and the market was disappointed!

November 5th, 2016 Comments off

Markel reported Q3 2016 results and the stock finished the day with a loss of 2.4%! Why that?

Book value rose 9% yoy to $ 609.48! Not a bad result, but the consolidated combined ratio worsened to 98% compared to 93% one year ago.

The US insurance segment even lost money with a combined ratio of 101% due to over $50 million of losses and loss adjustment expenses in response to claim trends in Markel’s medical malpractice and specified medical product lines (the transcript of the Q3 conference call has been published by Thomson Reuters). The market didn’t like that.

But investment results showed a much better picture this quarter:
Comprehensive income to shareholders was $89.2 million for the quarter improving from a comprehensive loss to shareholders of $51.1 million one year ago and net investment income grew 7% year over year to $93.1 million.

The non-insurance operations called Markel Ventures also performed very well:
Markel Ventures’ net income to shareholders more than doubled yoy to $13.5 million and Markel Ventures’ EBITDA rose 42% yoy to $41.8 million

Beside the negative insurance claim trends in Markel’s US medical malpractice segment which should be considered a temporary problem Markel performed well in the 3rd quarter of 2016.

At yesterday’s close of $ 825.07 the stock is valued at a price/book ratio of 1.4
Markel certainly remains a long term buy at this price!

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Markel reported a 9% increase of book value!

November 2nd, 2016 Comments off

Markel Corp. (NYSE: MKL), the speciality insurer, released Q3 2016 results.

Book value /common share increased by 9% to $609.48

 

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Colfax surprised the markets!

October 31st, 2016 Comments off

Colfax Corp. (NYSE: CFX) the fluid handling and fabrication technology group surprised the markets with Q3 2016 earnings.

The company released a profit of 23 cents per share.despite a 9.3% decrease of quarterly revenue to $879.2 million. Earnings, adjusted for one-time gains and costs, were 39 cents per share, 4 cents better than analysts expectations.

Permanent cost reductions, application of „Colfax Business System (CBS)“ and strategic growth initiatives contributed to these results as CEO Matt Trerotola pointed out in the conference call.

“Although our end markets have not improved, the impact of CBS and our strategic growth initiatives are positioning us to outperform. This was demonstrated by several large project winds and asset handling this quarter, and by our Fabrication Technologies Teams’ growth in emerging markets.”

So CFO Chris Hix consequently raised the lower end of the previously-issued adjusted EPS range by $0.05 and now expects $1.50 to $1.55 for full-year 2016 which gave a boost to the stock price!

It really seems that Colfax finally is able to turn things around!

The market environment is still difficult but they already start to grow project orders and continue to apply vigorous cost reductions. This should lead to a huge upside once their relative industrial markets will improve.

At $ 31.85 Colfax stock is valued at a p/e ratio of 21.
At this price the stock market is already anticipating the company’s improvement but it doesn’t seem to late for new investors to open a position in CFX!

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Colfax released Q3 2016 results!

October 28th, 2016 Comments off

Colfax Corp. (NYSE: CFX) released Q3 2016 results!

Not as bad as some had expected. The stock jumped 9% yesterday!

 

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Very solid results from Markel in Q2 2016!

August 4th, 2016 Comments off

Once again specialty insurer and financial holding company Markel Corp. (NYSE: MKL) released very solid results in Q2 2016!
The transcript of the conference call has been published by SeekingAlpha.

Diluted net income per share was down to $5.41 for the quarter compared to $6.72 for the second quarter of 2015 but the all important ratio in the insurance industry, book value/common share outstanding increased to $603.13 in Q2, up 7% from $561.23 atDecember 31, 2015.

Even better the combined ratio improved to 93% compared to 96% for the second quarter of 2015.
But be aware: Markel actually profits from the absence of large loss events. This will not always be the case in the future. So as a general rule investors should expect a combined ratio below 100%

Co CEO Thomas Gayner was proud to report that this quarter all 3 segments insurance, investments and Markel Ventures contributed to the good results:

“On the investment side of house we earned 5.3% on our equity investments and 4.7% on our fixed income holdings with the total return from the portfolio of 4.9%.
At June 30 equities represented 52% of our shareholders equity compared to 51% at year end.”

At Markel Ventures revenues increased 21% to $584 million compared to $485 million a year ago, primarily due to the acquisition of CapTech in the fourth quarter 2015 and higher sales volume in the manufacturing operations. EBITDA increased 92%, $102 million compared to $53 million.

After the earnings release Markel’s stock went down to $ 921.70 but don’t forget that the stock for some months now is trading at or above 1.5 times book value/share. This is a historically rather expensive stock price for MKL.

But this certainly doesn’t change our long term view!
Markel Corp. remains one of the best long term wealth creators in the stock market today!

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Still a lot of headwinds at Colfax!

July 29th, 2016 Comments off

Colfax Corp. (NYSE: CFX) reported Q2 2016 results yesterday and proved that the economic sectors they are working in are still in very difficult conditions.

Even as they managed to beat analyst expectations they reported lower net sales and lower net earnings than one year ago:
Net sales were $957.2 million, a decrease of 6.7% from the prior year.
Net income was $39.8 million, or $0.32 per dilutive share, compared to $53.1 million, or $0.42 per share, for the second quarter of 2015.

Even more worrisome is that second quarter gas- and fluid-handling orders decreased by 11.3% to $445.7 million compared to orders of $502.3 million for the second quarter of 2015, an organic order decline of 15.5%.

So what did Colfax do in order to address these market problems?

“In response, we have initiated additional, structural cost reduction actions to improve profitability even if the market does not return to growth in near term,” CEO Matthew Trerotola pointed out in the press release.

Shareholders can learn 2 things from this comment:
– Colfax visibility when market conditions will improve is very low.
– Colfax does what it already does for a couple of quarters: lowering costs and restructuring. This will indeed be a   very lean company when finally market conditions will improve.

But until this happens probably a lot more patience is needed.

Colfax stock trades at a p/e ratio of around 19, this is not exactly cheap as the market continues to have faith in this high quality company.

Perhaps news from the acquisition front could brighten the picture but until now nothing has been announced.

Colfax share is a buy for longterm oriented shareholders who can hold out at least until 2017!

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Colfax released Q2 2016 results and topped expectations!

July 28th, 2016 Comments off

Colfax Corp. (NYSE: CFX) the gas and fluid handling company today released Q2 2016 results:

EPS adjusted for restructuring costs came in at $0.41, revenues for the quarter were $957.2 million.

Both numbers exceeded analysts expectations!

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Markel is off to a strong start in 2016!

May 6th, 2016 Comments off

Markel Corp. (NYSE: MKL) released its Q1 2016 earnings and is “off to a strong start” as pointed out Executive Chairman Alan I. Kirshner.

Book value per common share outstanding came in at $589.86 at March 31, 2016, up 5% from $561.23 at December 31, 2015.

Comprehensive income to shareholders was $397.0 million for the first quarter of 2016 up 41% compared to $281.8 million for the first quarter of 2015.

The combined ratio was 88% for the first quarter of 2016 slightly up compared to 83% for the first quarter of 2015, due to a 5 points less favorable development in the prior accident year loss ratio in 2016 compared to 2015.

The transcript of the conference call has been published by Thompson Reuters.

“Our first quarter results were very strong and are in many ways a continuation of the trend that we saw in 2015 with our investing, underwriting, and Markel Ventures operations all contributing to our success” pointed out CFO Anne Waleski on the call.

Total operating revenues grew 6% to just under $1.4 billion in 2016 from $1.3 billion in 2015. The increase is driven by a roughly 18% increase in revenue from Markel Ventures.

“On the investment side, Markel earned 3.6% on the equity investments and 2.4% on the fixed income holdings with a total return from the portfolio of 3.1%”, explained CIO Tom Gayner.

Equities represented 52% of shareholders’ equity at the end of the first quarter.

No wonder that investors liked what they saw and Markel’s stock briefly jumped up to $950.

At yesterday’s close of $937 Markel’s stock is valued at a book value/share of 1.6 which can be considered as fairly valued.

But Markel’s stock is a buy at any weakness considering their strong ability to create shareholder value powered by “three engines”, the insurance operations, the investment activities, and Markel Ventures!

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Colfax still faces headwinds from their end markets

May 6th, 2016 Comments off

Colfax Corp. (NYSE: CFX) released Q1 2016 earnings.
The conference call transcript has been released by Thompson Reuters!

Colfax’s adjusted net income dropped to $36.9 million, or $0.30 per share, compared to last year’s first-quarter mark of $44.5 million.
Revenue dropped 3.8% to $876.8 million during the first quarter.
Despite topping estimates the stock declined 20% over the last 5 days. The financial market is clearly spooked by bad conditions of Colfax’ end markets.

As Colfax new CEO Matt Trerotola pointed out in the conference call:
“We continue to make good progress on our cost reduction efforts, but our progress on growth initiatives has been offset by the end market environment, which remains choppy with a mix of positives and negative indicators and no clear sign of recovery in the near-term.”

With continued weakness in the oil and gas industry Colfax is focused on cost reduction and share buy backs.
Already they are monitoring market conditions and order activity to get an early picture of 2017.

Despite those excellent internal efforts Colfax’ stock will continue to suffer until market conditions improve.

When will that happen? Unfortunately no one knows.

Shares of Colfax remain a buy at these depressed prices for the long term investor who has the patience to wait until the markets turn! And one day they will turn, that’s for sure!

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Colfax reports Q1 2016 results!

May 3rd, 2016 Comments off

Colfax Corp. (NYSE: CFX) reported Q1 2016 results today Have a look!

They beat earnings per share by $ 0.03 and also revenue came in higher than expected!

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