Markel Corp (NYSE:MKL)

CAPS Rating: 5 out of 5

The Company markets and underwrites specialty insurance products and programs to a variety of niche markets and operates in three segments of the specialty insurance marketplace: the Excess and Surplus Lines, the Specialty Admitted and the London markets.


Player Avatar TempoAllegro (30.25) Submitted: 2/15/2013 2:50:39 AM : Outperform Start Price: $490.08 MKL Score: +4.46

Markel is a powerhouse because as a specialty insurer, they both know how to underwrite and how to invest their float. Tom Gayner is doing a great job investing mostly in equities, and buying Markel today is essentially like buying a concentrated hedge fund run by Mr. Gayner, which is why Markel is often compared to Berkshire-Hathaway.

If we look at the top picks of Markel, the first, in fact, is Berkshire-Hathaway. Then comes CarMax, Diageo, Brookfield Asset Management, and Fairfax Financial Holdings, which is run by Prem Watsa, who has been called "the Warren Buffett of Canada." Here are some more of Markel's portfolio: Exxon-Mobil, Disney, Walmart, United Parcel Service. These 9 picks are over half of Markel's equity portfolio.

It would seem to me that Mr. Gayner is both learning from his picks, meaning he is associating himself with the right potential mentors by going all in on those stocks, or buying companies with pristine balance sheets or irreplaceable assets or management teams. The sum total is that Markel, itself, becomes irreplaceable.

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