Asmus Puhl Finance Blog

Sometimes continued success can be a little boring…

Markel Corp.(NYSE:MKL) reported excellent Q3 2021 results:

“Our third quarter and year-to-date results reflect the strength and balance of our three-engine operating model of insurance, investments and Markel Ventures,” said Thomas S. Gayner and Richard R. Whitt, Co-Chief Executive Officers.

Earned premiums grew 17% for the 3rd quarter, reflecting continued growth in gross premium volume from new business and more favorable rates.

The combined ratio for the 3rd quarter 2021 included $114.4 million, or seven points of net losses and loss adjustment expenses attributed to natural catastrophes.
The ratio improved to 93% from 97% quarter over quarter.

Looking at the “second engine“, net investment gains for the nine months ended September 30, 2021 reflected a substantial increase in the fair market value of our equity portfolio driven by favorable market value movements during 2021.

And the Markel Ventures businesses continue to grow and add value. They added Buckner HeavyLift Cranes to the group in the third quarter.

The all important metric of the insurance industry book value per common share outstanding came in at $ 988.99 up from $ 885.72 in the 3rd quarter 2020.

Markel remains a stable long term investment. A significant upturn of this company eventually will be seen when interest rates continue to rise which will improve the results of the fixed income segment of their investment portfolio.

Markel is valued at 1.3 price / book value which is not too expensive.
Markel is a buy for longterm investors!

Investors liked Shopify’s (NYSE, TSX:SHOP) Q3 2021 results!

More and more merchants are using the platform even now as the economic environment starts to normalize.

Total revenue in the third quarter was $1,123.7 million, up 46% year over year.
GMV (Gross merchandise volume or all merchandises sold via the platform) for the third quarter was $41.8 billion, an increase of $10.8 billion or 35% over the third quarter of 2020.

Shopify’s cash position grew year over year to $7.52 billion up from $6.39 billion at December 31, 2020.

Shopify is heavily investing in its growth initiatives:

The company launched Shopify Markets, a product that makes cross-border commerce easier for entrepreneurs. Shopify began rolling out Shopify Balance, a money management product for merchants in the United States, introduced TikTok Shopping to merchants and continued the buildout of its fufillment network.

Therefore Shopify’s adjusted earnings per share fell 28% to $0.81.

Shopify’s share trades at a price/sales ratio of 47 and a price/earnings ratio of 76. Certainly a steep price!

But if you believe that the future of e-commerce will not only be in the hands of a few very big players like Amazon but in the hands of many smaller more specialized merchants than Shopify is a clear „Buy“.

Shopify is the „enabler“ of those merchants and still has enormous growth potential.