Archive for February, 2018

Markel finishes 2017 in excellent shape!

February 10th, 2018 Comments off

Markel Corp. (NYSE:MKL) released FY and Q4 2017 earnings demonstrating that the speciality insurer finished FY 2017 in excellent shape!

Book value per share the most important ratio in the insurance business rose 12.7% from $606.30 at year-end 2016 to $683.55 as of Dec 31, 2017.

The combined ratio in the 4th quarter was 95% improving rapidly from the 134% in Q3 2017 due to the losses from the hurricanes.

The equity portfolio of Markel in 2017 contributed to the success in a remarkable way:

The portfolio climbed 25.5% outperforming the S&P500 not only this year but already for 3 decades.

Good news also came from Markel Ventures :

Operating revenue climbed 29.5% to $400 million in 2017, already including Markel’s majority stake acquisition in Costa Farms in August and net income jumped to $65.2 million from $6.7 million in the 4th quarter 2016.

In the 4th quarter Markel also completed the acquisition of property and casualty insurance services company State National, which adds a premier fronting platform and collateral protection coverages to their insurance operations.


At yesterday’s closing price of $1084.97 Markel’s stock is valued at a price/book ratio of 1.6

Not cheap but certainly a buy at any dips in this volatile market.

And do not forget that insurances and banks in general will once again be able to earn interest income when rates are continuing to climb.


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Colfax has become a difficult company to evaluate!

February 8th, 2018 Comments off

Colfax Corp. (NYSE: CFX) has become a difficult company to evaluate:

The company has a strong culture, is very cost conscious applying their Colfax Business System (CBS) tools. They are able to acquire and integrate rapidly complementary businesses.

But since 2014 the company struggles to produce significant growth which is reflected by the share price since then.

In 2017 they exited the fluid handling business selling it to Circor International Inc. and by that reducing debt and improving their balance sheet.


But the question remains: Will Colfax return to higher growth rates investors once were accustomed to?

Unfortunately the release of FY and Q4 2017 results did not provide any certain answers:

Sure, earnings on a pro forma basis beat market estimates by a penny but on a GAAP basis net income per share for the 4th quarter came in at only $0.10 per share.

From continuing operations Colfax even reported a loss of $1.53 per share.


Apparently the fabrication technology sector fared rather well in the 4th quarter. Colfax reported an organic growth of 7%.

But the Air & Gas Handling sector is expected to improve only in the second half of 2018 as CEO Trorotola explained on the Conference Call.

Reflecting the uncertainty Colfax gave guidance of FY 2018 earnings of $ 2 – $ 2.15 but once again only on an adjusted basis!

The market did not like what he saw and sent the share price down by 9%.


So what should shareholders do now?

Perhaps the best for the moment is a „wait and see approach“. In 2 quarters it should be clear whether Colfax’ end markets are finally recovering or not.

If not and if the share price continues to hover around today’s prices it’s perhaps the moment to look for better investment opportunities elsewhere!


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Colfax Corporation released FY and Q4 2017 results!

February 8th, 2018 Comments off

Colfax Corp. (NYSE: CFX) the fabrication technology and air and gas handling company released FY and Q4 2017 results which sent the stock 9% down on the day!