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This Insurer Is No 'Mini-Berkshire'

Markel has developed a strong reputation as a mini-Berkshire, but the resulting premium on its share price is unwarranted.

This Insurer Is No 'Mini-Berkshire'
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Brett Horn: A number of insurers have drawn comparisons to Berkshire Hathaway over the years. In our view, Markel has developed the strongest reputation as a mini-Berkshire. The shares currently trade at a substantial premium as a result, currently trading at about 2.1 times tangible book. We think this comparison is inaccurate and the premium is unwarranted.

We grant that Tom Gayner has proven himself to be a very good stock-picker, but we estimate that even if he maintains his outperformance going forward, this would add only about 1% annual book-value growth, which suggests that at best investors should pay a modest premium.

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Brett Horn does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.