Do Hedge Funds Love Markel Corporation (MKL)?

Insider Monkey finished processing more than 700 13F filings made by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30. What do these smart investors think about Markel Corporation (NYSE:MKL)?

Markel Corporation (NYSE:MKL) shareholders have witnessed a decrease in hedge fund sentiment of late. MKL was in 21 hedge funds’ portfolios at the end of September. There were 20 hedge funds in our database with MKL positions at the end of the previous quarter. At the end of this article we will also compare MKL to other stocks including SK Telecom Co., Ltd. (ADR) (NYSE:SKM), FleetCor Technologies, Inc. (NYSE:FLT), and Church & Dwight Co., Inc. (NYSE:CHD) to get a better sense of its popularity.

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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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Keeping this in mind, we’re going to take a gander at the fresh action regarding Markel Corporation (NYSE:MKL).

What does the smart money think about Markel Corporation (NYSE:MKL)?

At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a 25% decline from one quarter earlier. The graph below displays the number of hedge funds with bullish position in MKL over the last 5 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Charles Akre’s Akre Capital Management has the most valuable position in Markel Corporation (NYSE:MKL), worth close to $478.2 million, accounting for 9.2% of its total 13F portfolio. The second largest stake is held by  Jim Simons’ Renaissance Technologies, which holds a $109.9 million position. Some other professional money managers that hold long positions contain Brian Bares’ Bares Capital Management, Brian Ashford-Russell and Tim Woolley’s Polar Capital and Chuck Royce’s Royce & Associates. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Judging by the fact that Markel Corporation (NYSE:MKL) has witnessed falling interest from the aggregate hedge fund industry, it’s safe to say that there were a few hedgies who were dropping their entire stakes in the third quarter. At the top of the heap, Israel Englander’s Millennium Management cut the largest stake of all the hedgies monitored by Insider Monkey, valued at close to $3.1 million in stock. Matthew Hulsizer’s fund, PEAK6 Capital Management, also said goodbye to its call options, about $1 million worth.

Let’s also examine hedge fund activity in other stocks similar to Markel Corporation (NYSE:MKL). We will take a look at SK Telecom Co., Ltd. (ADR) (NYSE:SKM), FleetCor Technologies, Inc. (NYSE:FLT), Church & Dwight Co., Inc. (NYSE:CHD), and Red Hat, Inc. (NYSE:RHT). All of these stocks’ market caps are similar to MKL’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SKM 12 80765 2
FLT 60 4383369 8
CHD 18 269513 -2
RHT 34 985789 -1

As you can see these stocks had an average of 31 hedge funds with bullish positions and the average amount invested in these stocks was $1.43 billion. That figure was $900 million in MKL’s case. FleetCor Technologies, Inc. (NYSE:FLT) is the most popular stock in this table. On the other hand SK Telecom Co., Ltd. (ADR) (NYSE:SKM) is the least popular one with only 12 bullish hedge fund positions. Markel Corporation (NYSE:MKL) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard FLT might be a better candidate to consider taking a long position in.

Disclosure: None