{"id":1886,"date":"2017-02-15T11:19:45","date_gmt":"2017-02-15T09:19:45","guid":{"rendered":"http:\/\/www.blog.asmus-puhl.com\/?p=1886"},"modified":"2017-02-15T11:19:45","modified_gmt":"2017-02-15T09:19:45","slug":"markels-future-results-will-be-influenced-by-a-rising-interest-environment","status":"publish","type":"post","link":"http:\/\/www.blog.asmus-puhl.com\/?p=1886","title":{"rendered":"Markel&#8217;s future results will be influenced by a rising interest environment!"},"content":{"rendered":"<p>Markel Corp. (NYSE: MKL) <a href=\"http:\/\/finance.yahoo.com\/news\/markel-reports-2016-financial-results-213500136.html\" target=\"_blank\">FY and Q4 results<\/a> were certainly good, but do not appear sensational.<\/p>\n<p>But at a second glance Markel is the excellent speciality insurer and investment company it always was!<\/p>\n<p>Book value\/share only increased 8% to $606.30 compared to $561.23 at December 31, 2015.<\/p>\n<p>The combined ratio increased 3% to 92% in the year over year comparison, but this is still very good in a competitive and difficult insurance market.<\/p>\n<p>Markel Ventures the private equity division of Markel also reported very good results:<\/p>\n<p>Revenue increased by 20% to $1.2 billion and EBITDA increased by an astonishing 81% to $165 million, very good indeed!<\/p>\n<p>Perhaps the most interesting remarks on the <a href=\"http:\/\/finance.yahoo.com\/news\/edited-transcript-mkl-earnings-conference-205128851.html\" target=\"_blank\">conference call<\/a> came from CIO Tom Gayner regarding the investment results:<\/p>\n<p>&#8220;First, we earned 13% on our equity investments during the year, which exceeded the S&amp;P 500 return to 12%, 500 basis points.&#8221;<\/p>\n<p>The fixed income portfolio for all of 2016 earned 2.4% in local currency terms.<\/p>\n<p>But wait! This is the number that will improve over time in a rising interest environment:<\/p>\n<p>&#8220;While the mark-to-market price of that portfolio dropped a bit in the fourth quarter, with rising interest rates, the reinvestment of new funds took place at higher rates.&#8221;<\/p>\n<p>Markel stock trades at 1.5 times book value. This is not cheap but a reasonable price for a long term investment in a high quality company!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Markel Corp. (NYSE: MKL) FY and Q4 results were certainly good, but do not appear sensational. But at a second glance Markel is the excellent speciality insurer and investment company it always was! Book value\/share only increased 8% to $606.30 compared to $561.23 at December 31, 2015. The combined ratio increased 3% to 92% in [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[3],"tags":[],"_links":{"self":[{"href":"http:\/\/www.blog.asmus-puhl.com\/index.php?rest_route=\/wp\/v2\/posts\/1886"}],"collection":[{"href":"http:\/\/www.blog.asmus-puhl.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.blog.asmus-puhl.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.blog.asmus-puhl.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.blog.asmus-puhl.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1886"}],"version-history":[{"count":19,"href":"http:\/\/www.blog.asmus-puhl.com\/index.php?rest_route=\/wp\/v2\/posts\/1886\/revisions"}],"predecessor-version":[{"id":1905,"href":"http:\/\/www.blog.asmus-puhl.com\/index.php?rest_route=\/wp\/v2\/posts\/1886\/revisions\/1905"}],"wp:attachment":[{"href":"http:\/\/www.blog.asmus-puhl.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1886"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.blog.asmus-puhl.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1886"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.blog.asmus-puhl.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1886"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}