Value Investing-Oriented Markel Corp’s Top Stock Picks

Tom Gayner became the head of Markel Gayner Asset Management‘s investment division in 1990. He has been Markel’s chief investment officer since 2004. The holding company is similar to Warren Buffett’s Berkshire Hathaway in terms of operations and strategy owing to its emphasis on value investing, which is manifested by the long time that Markel holds its stakes for. According to the firm’s latest 13F filing, most of its investments were in the finance and consumer discretionary sectors. Let us take a gander at how the fund manager has geared Markel’s equity portfolio for the second quarter.

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#5 Walt Disney Co (NYSE:DIS)

– Shares Owned by Markel Capital (as of March 31): 1.59 Million

– Value of Holding (as of March 31): $158.02 Million

Markel inched up its stake in Walt Disney Co (NYSE:DIS) by acquiring 2,200 shares during the first trimester. The holding represents about 4.24% of the company’s equity portfolio. The $173 billion broadcasting company was entrenched in a negative investor sentiment with shares plummeting by about 25% from November last year to February. However, shares have rallied by nearly 12% since then as CEO Robert Iger appeased the concerns surrounding ESPN in February claiming that the subscribers for the sports channel finally showed an increase after witnessing a downtrend that lasted for a number of years. Another fund bullish on Walt Disney Co (NYSE:DIS) is Ken Fisher‘s Fisher Asset Management as it held about 8.65 million shares valued at $852.38 million at the end of March.

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#4 Brookfield Asset Management Inc (NYSE:BAM)

– Shares Owned by Markel Corp (as of March 31): 5.05 Million

– Value of Holding (as of March 31): $175.62 Million

After an addition of 5,200 shares during the March quarter Markel’s Brookfield Asset Management Inc (NYSE:BAM) holding represented 4.71% of its portfolio. The firm has held a stake in the Toronto-based global alternative asset manager since the fourth quarter of 2007. Recently Brookfield joined hands with Qube Holdings Ltd. to buy the Australian port and rail operator for A$ 9.05 billion ($6.8 billion). Brookfield Asset Management has more than $200 billion worth of assets under its management with the portfolio focused on renewable energy, infrastructure and property sectors. Murray Stahl’s Horizon Asset Management slashed its Brookfield Asset Management Inc (NYSE:BAM) holding by 11% to 3.20 million shares during the first trimester.

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#3 Walgreens Boots Alliance Inc (NASDAQ:WBA)

– Shares Owned by Markel Corp (as of March 31): 2.14 Million

– Value of Holding (as of March 31): $179.85 Million

Moving on to Markel’s big bet in the healthcare sector, Walgreens Boots Alliance Inc (NASDAQ:WBA), a stake in which was also initiated in the fourth quarter of 2007. So far this year, Walgreens’ stock is down by about 5%. The global pharmacy-led health and well-being enterprise failed to meet the expectations for its first quarter top line, but beat the bottom line estimates by a small margin. Walgreens Boots Alliance Inc (NASDAQ:WBA) recently announced that it will expand mental health services, including access to behavioral health treatment via telemedicine or MDLive to be precise, to expand customer options for treatment, screenings and awareness. David Harding‘s Winton Capital Management slashed its Walgreens Boots Alliance Inc (NASDAQ:WBA) holding by 44% to 317,800 shares during the January-March period.

#2 Berkshire Hathaway Inc. (NYSE:BRK.A/BRK.B)

– Class A Shares Owned by Markel Corp (as of March 31): 1,084

– Value of Holding (as of March 31): $231.38 Million

Markel also held 1.51 million Class B shares of Berkshire Hathaway Inc. (NYSE:BRK.B) valued at $214.47 million and 1,084 class A shares worth $231.38 million. Stakes of both class A and class B shares remained unchanged over the quarter. In the first quarter, Berkshire Hathaway Inc. (NYSE:BRK.A) delivered earnings of $2,274 per share, which were in-line with the preliminary figures that the company provided, but a bit lighter than what analysts had had in mind. Lackluster performances in the insurance and railroad businesses that the company owns underpinned this disappointment. While persistently low interest rates have made investment of the float less profitable for insurance companies, the railroad business has been lagging owing to foreign currency headwinds and a commodity supercycle that is coming to a close. First Eagle Investment Management slashed its Berkshire Hathaway Inc. (NYSE:BRK.A) holding by 55% during the January-March period to 1,515 class A shares valued at $323.38 million.

#1 CarMax, Inc (NYSE:KMX)

– Shares Owned by Markel Corp (as of March 31): 4.91 Million

– Value of Holding (as of March 31): $251.06 Million

The holding which was initiated by Markel in the fourth quarter of 2007 remained unchanged between January and March and represented about 2.35% of CarMax, Inc (NYSE:KMX)’s outstanding stock. Even though the $10.3 billion provider of used vehicles and related products and services beat top- and bottom-line estimates in its financial results for the fourth fiscal quarter ending on February, its stock price is down by almost 6% so far this year as investors believe that the company’s growth is slowing down. Prescott Group Capital Management, which is led by Phil Frohlich held 20,000 shares of CarMax, Inc (NYSE:KMX) valued at $1.02 million at March-end.

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Disclosure: None