Exceptional Outcomes from Insurance and Investment Operations Lifted Markel Group (MKL)

Fenimore Asset Management, an investment management company, released its Q4 2025 investor letter. A copy of the same can be downloaded here. The stock market was solid in 2025 but volatile. While investors balanced AI enthusiasm, economic uncertainty, and monetary policy concerns.  The summer rally was driven by AI-related spending and economic resiliency, whereas the fourth quarter saw a more volatile market due to valuation pressures and macro uncertainty. Stocks from the large-cap technology and communication services sectors led the market in the quarter, with the S&P 500 Index rising 2.66%. The firm believes that the trend of AI stocks outpacing high-quality stocks is unsustainable. In Q4 2025, Fenimore Small Cap Strategy returned -4.12%, trailing its benchmark, the Russell 2000 Index’s 2.19% return. The underweight exposure to low-quality stocks drove the underperformance in the quarter. Fenimore Dividend Focus Strategy declined -4.41% in Q4 compared to the Russell Midcap Index’s 0.16% return. Furthermore, Fenimore Value Strategy declined -1.17% in Q4 compared to the Russell Midcap Index’s 0.16% return. Investments in the financial and industrial sectors led to the relative underperformance of the Strategy in the quarter. The firm expects mixed market conditions in 2026 as many AI-related stocks look expensive while high-quality companies are trading at multi-year lows, creating opportunities. In addition, please check the fund’s top five holdings to know its best picks in 2025.

 In its fourth-quarter 2025 investor letter, Fenimore Asset Management highlighted stocks such as Markel Group Inc. (NYSE:MKL). Markel Group Inc. (NYSE:MKL) was the top performer in the Fenimore Value Strategy during the quarter. Based in Glen Allen, Virginia, Markel Group Inc. (NYSE:MKL) is a financial holding company that underwrites insurance products. On January 15, 2026, Markel Group Inc. (NYSE:MKL) stock closed at $2,084.14 per share. One-month return of Markel Group Inc. (NYSE:MKL) was -3.81%, and its shares gained 17.48% of their value over the last 52 weeks. Markel Group Inc. (NYSE:MKL) has a market capitalization of $26.37 billion.

Fenimore Asset Management stated the following regarding Markel Group Inc. (NYSE:MKL) in its fourth quarter 2025 investor letter:

“Our top contributors to performance were Ross Stores (ROST), Markel Group Inc. (NYSE:MKL), and Amphenol Corporation (APH). MKL produced excellent results in its insurance and investment operations. The insurance segment delivered a 93% combined ratio while the equity portfolio benefited from the year-end market rally. MKL’s disciplined capital allocation, including significant stock buybacks, boosted their book value per share growth.”

Is Markel Group Inc. (MKL) the Highest-Priced Stock Right Now?

Markel Group Inc. (NYSE:MKL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 38 hedge fund portfolios held Markel Group Inc. (NYSE:MKL) at the end of the third quarter, compared to 40 in the previous quarter. While we acknowledge the risk and potential of Markel Group Inc. (NYSE:MKL) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Markel Group Inc. (NYSE:MKL) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Markel Group Inc. (NYSE:MKL) and shared a bullish thesis on the company. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.