Tom Gayner’s Markel Gayner Asset Management, the investment division of Markel Corporation (NYSE:MKL) has filed its 13F with the Securities and Exchange Commission for the reporting period of March 31. We’ve poured through the equity holdings of Gayner, who’s run an extremely successful fund over the past 20 years, with average yearly returns exceeding 10%. We’ve already focused on the fund’s top longterm value investments, which included CarMax Inc. (NYSE:KMX), Walgreens Boots Alliance Inc (NASDAQ:WBA), and Walt Disney Co (NYSE:DIS). Now we’ll take a look at Gayner’s holdings in the energy sector.
Let’s start with Exxon Mobil Corporation (NYSE:XOM), who we crowned yesterday as the best energy company in the world. Among other things, we cited Exxon’s disciplined approach to the projects it undertakes, which has allowed it to steer clear of money-draining operations during the challenging energy climate of late. In addition, Exxon Mobil Corporation (NYSE:XOM) raised $8 billion through a debt offering in March, which could be used to acquire a cheaper energy company at a favorable valuation, given the plummeting market caps of many energy companies over the past ten months. Gayner also feels highly about Exxon, with the company ranking as his top energy stock through a $73.85 million holding consisting of 868,800 shares. Exxon Mobil Corporation (NYSE:XOM) posted first quarter earnings per share of $1.17, trouncing estimates that predicted $0.83, though shares are still down by 6% year-to-date and nearly 15% over the past calendar year. The stock has a dividend yield of 3.36% and ranks as a popular dividend aristocrat, and trades at a P/E of just 13.07 and a forward P/E of 16.39. While Warren Buffett notably dumped his large position in Exxon during the fourth quarter of 2014, the stock maintains numerous other prominent investors, including respected value investor Donald Yacktman and billionaires Ken Fisher and Ken Griffin.
Schlumberger Limited. (NYSE:SLB) is next on the list, with Gayner holding a position of 545,000 shares worth $45.78 million, having increased the position by 34% during the first quarter. Schlumberger Limited. (NYSE:SLB) is experiencing a quicker turnaround than Exxon in investor sentiment, gaining 8% in 2015, though it’s still down by 8% over the past calendar year. As mentioned above, Exxon has not had to resort to cutting back as deeply on capital spending because of its more stable position, however the market appears to be favoring the more overt steps taken by Schlumberger recently, including the announcement that it will cut 11,000 jobs from its workforce. Schlumberger Limited. (NYSE:SLB)’s latest earnings came in slightly below Exxon’s at $1.06 per share, while the stock trades at a heftier P/E of 24.02. Schlumberger is also a top pick of John A. Zaro’s Bourgeon Capital, while Douglas Dethy of DC Capital Partners had exposure of 20% to the stock in his equity portfolio as of the end of 2014.
