Archive for August, 2016

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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