22 Q2 Buybacks


numbers in thousands
except per share

          shares       amount     average
          repurchased  paid       price 
                                  per share

22 Q1     63           79,296     1258.66

22 Q2     33           46,995     1424.09 

Markel does not buy back regardless of price. Gayner must think these are attractive valuations. Price is now 1168. Buying now and checking back after a few years should yield pleasant returns.

Link to 2Q report:
https://markel.gcs-web.com/static-files/c86b2fa4-8dd3-4385-9…

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Book Value:

2Q 22   **898.53**
1Q 22   995.53
4Q 21  1034.56
3Q 21   980.99 
2Q 21   974.45
1Q 21   913.33
4Q 20   885.72

We have basically given up all the gains of 2021 and back to where we were at 2020 yearend. It’s a combination of equities going down in 2Q and rising interest rates bringing fixed income down. Markel holds fixed income to maturity, so there will be no actual credit losses. Just the fair value came down.

But the business itself is apparently doing well based on what I heard in the 2Q earnings call. Markel Ventures and the Insurance operation are both doing well with revenues rising.

I am hoping this is a coiled spring situation. The stock has been round tripping in the last few years. We need a convincing breakout.

2Q earnings call
https://app.webinar.net/LQZbPxErp2J

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Excerpts from the earnings call.

Markel Ventures produced record revenues of $2.3 billion, up from $1.8 billion and more importantly, record EBITDA of $250 million compared to $220 million last year.

I’ll reiterate my comment about how hard it is to find acquisitions right now, but I will report to you that several of our companies are working on adding to their businesses from their base of knowledge of people and opportunities that they know.

It’s a great thing for Markel that people already on our team, proven winners who have deep industry expertise, can find and welcome additional people and businesses to the family.

The market downturn we’ve experienced so far in 2022 creates a good economic opportunity for Markel. This is precisely the sort of environment where our three-engine architecture really shines. Our insurance engine continues to produce solid profitability and cash. Our Ventures engine continues to produce solid profitability and cash.

Also, our recurring stream of dividends and interest income actually increased to $198 million, compared to $188 million a year ago.

On the front of the income statement, we reported net investment losses of $1.9 billion through the first half of 2022, compared to a gain of $1.2 billion in the first half of 2021. Both of those numbers are largely unrealized and just displayed the normal volatility we expect from both equity and fixed income markets. Even after the first half drama of the worst first half for the S&P 500 in 50 years, we still have an unrealized gain on our equity portfolio of $4.2 billion.

While that gain is down from $6.2 billion at year-end 2021, I think it’s fair to say that our long-term track record of earning excellent returns in our equity portfolio remains true. The rebound in equity markets in July might foreshadow the other part of what the word volatility means when we tell the third quarter results. We’ll see. Our first half negative return of 20.6% trailed the S&P 500 return of 20% – negative 20% by smidge.

Today, as we stated, unrealized gain on our equity portfolio stands at $4.2 billion, even after the worst first half start for equity markets in 50 years. Add on here are two other data points from the 2017 second quarter 10-Q. Our earned premium back then was a little over $2 billion during the first half of 2017, compared to $3.6 billion in the first half of 2022. We also reported revenues of $638 million at Markel Ventures in 2017 compared to the $2.6 billion we just reported for the first half of 2022.

We purchased roughly $200 million of additional equity securities. We also repurchased roughly $125 million of Markel common stock, and we repaid $350 million of long-term debt. To summarize, I’m pleased with our recent results. We’re enjoying excellent results in our insurance and ventures engines, and I think we’re creating solid results in our investment engine, even though it might not look that way at the moment.

https://www.fool.com/earnings/call-transcripts/2022/08/03/ma…

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Somebody at Berkshire Hathaway is also buying MKL shares. The amounts involved are too small for it to be Buffett’s. It is either Ted Weschler or Todd Coombs. My guess is it is Ted Weschler’s simply because he lives in Charlottsville Va, close to MKL’s Richmond HQ, so may be following it more closely.

Their reported purchase prices are very similar. The stock has traded below $1300 most of the year and still does. Both Tom Gayner and Ted/Todd are seeing the value in MKL. That’s good enough for me.

https://www.dataroma.com/m/hist/hist.php?f=BRK&s=MKL

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