Here is What Hedge Funds Think About Markel Corporation (MKL)

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended June 30th, so let’s proceed with the discussion of the hedge fund sentiment on Markel Corporation (NYSE:MKL).

Markel Corporation (NYSE:MKL) investors should pay attention to an increase in support from the world’s most elite money managers of late. Markel Corporation (NYSE:MKL) was in 33 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 37. There were 30 hedge funds in our database with MKL positions at the end of the first quarter. Our calculations also showed that MKL isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Paul Marshall Marshall Wace

Paul Marshall of Marshall Wace

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to take a gander at the recent hedge fund action surrounding Markel Corporation (NYSE:MKL).

Do Hedge Funds Think MKL Is A Good Stock To Buy Now?

At the end of the second quarter, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in MKL over the last 24 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Markel Corporation (NYSE:MKL) was held by Polar Capital, which reported holding $153.1 million worth of stock at the end of June. It was followed by AQR Capital Management with a $103.5 million position. Other investors bullish on the company included Giverny Capital, Wallace R. Weitz & Co., and Millennium Management. In terms of the portfolio weights assigned to each position Giverny Capital allocated the biggest weight to Markel Corporation (NYSE:MKL), around 5.15% of its 13F portfolio. Wallace R. Weitz & Co. is also relatively very bullish on the stock, dishing out 2.81 percent of its 13F equity portfolio to MKL.

As aggregate interest increased, some big names were leading the bulls’ herd. Gillson Capital, managed by Daniel Johnson, created the most valuable position in Markel Corporation (NYSE:MKL). Gillson Capital had $7.1 million invested in the company at the end of the quarter. Jinghua Yan’s TwinBeech Capital also initiated a $0.3 million position during the quarter. The following funds were also among the new MKL investors: Greg Eisner’s Engineers Gate Manager and Paul Marshall and Ian Wace’s Marshall Wace LLP.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Markel Corporation (NYSE:MKL) but similarly valued. We will take a look at TAL Education Group (NYSE:TAL), WPP Plc (NYSE:WPP), PPD, Inc. (NASDAQ:PPD), Franklin Resources, Inc. (NYSE:BEN), Quest Diagnostics Incorporated (NYSE:DGX), Eastman Chemical Company (NYSE:EMN), and Companhia Paranaense de Energia – COPEL (NYSE:ELP). This group of stocks’ market valuations are closest to MKL’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TAL 27 606671 -11
WPP 6 23931 1
PPD 37 1910889 8
BEN 30 205166 -1
DGX 31 376501 -3
EMN 27 156403 0
ELP 13 43466 8
Average 24.4 474718 0.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 24.4 hedge funds with bullish positions and the average amount invested in these stocks was $475 million. That figure was $709 million in MKL’s case. PPD, Inc. (NASDAQ:PPD) is the most popular stock in this table. On the other hand WPP Plc (NYSE:WPP) is the least popular one with only 6 bullish hedge fund positions. Markel Corporation (NYSE:MKL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MKL is 78.3. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. Hedge funds were also right about betting on MKL as the stock returned 11.2% since the end of Q2 (through 10/15) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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