Archive for May, 2016

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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