Markel is definitively a “buy” at this price!
Markel Corporation (NYSE: MKL) likes to bore us with good results over many years as CIO Tom Gayner pointed out after a conversation with a longterm shareholder.
So let’s have a quick look at the “boring“ Q3 2013 results:
As always Seeking Alpha published the transcript of their 2013 Q3 Conference Call and the company published the 10Q.
Total operating revenues grew 39% to $3 billion in 2013, from $2.2 billion in 2012.
The increase is due to a 42% increase in revenues from the insurance operations which includes $531 million from the Alterra segment and a 41% increase in revenues from their non-insurance operations which they refer to as Markel Ventures, as CFO Anne Waleski explained.
As Alterra added 6 points the combined ratio was 97% for the first nine months of 2013 compared to 96% in 2012. This highlights the integration effort still to make with Alterra.
Book value per common share outstanding increased 14% to $462.33 in Q3 up from $403.85 at the end of 2012.
And now have a look at this:
In the first nine months of 2013, revenue from Markel Ventures were $486 million, compared to $345 million in 2012. Net income to shareholders from Markel Ventures doubled to $18 million in 2013, compared to $9 million in 2012!
The last couple of quarters we already learned about the rapidly increasing importance of Markel Ventures and now its share of EBITDA from the company rose 54% to $64.2 million, up from $41.5 million a year ago!
At yesterday’s closing price of $ 538.58 the market valued Markel at at price/book ratio of only 1.2
2 things will more than others drive results at Markel in the future: Further improving results from the insurance segments when Alterra Holdings will be successfully integrated and the ever growing importance of Markel Ventures.
This stock is definitively a buy at this price!