MKL’s Investment Strategy Providing Better Returns

Analysts at Wunderlich Securities reiterate their "hold" rating on Markel Corporation MKL, while reducing their estimates for the company. The target price for MKL is set to $370. MKL has restructured its products and distribution to a regional format. According to Wunderlich Securities, “The individual company kiosks that offered all types of company-themed gewgaws were eliminated in favor of regional banners… MKL’s investment focus of a higher-than-average concentration in equities has offered MKL better returns than a more traditional FI portfolio. However, this strategy also offers greater risk.” The analysts added, “Markel’s existing management triumvirate of Alan Kirshner (age 74), chairman, Steven Markel, (age 61), vice chairman, and Anthony Markel, (age 68), vice chairman, will retain their existing roles… “Across the board” is the sentiment expressed by all of Markel management and employees regarding competition that remains difficult. In particular, the pricing in the excess & surplus lines (E&S) business is highly competitive. MKL’s executives expressed frustration as desperate competitors cut price to retain market share.” Wunderlich Securities has raised its EPS estimate for 2010 from $17.22 to $17.50, and reduced its EPS estimate for 2011 from $20.88 to $20.00 to “reflect lower underwriting profitability over the next two years, absent a pricing catalyst.” More Analyst Ratings here