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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Markel Corporation (XNYS:MKL) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
MKL
Name:
Markel Corporation (XNYS:MKL)
Sector:
363.18M
Industry:
Insurance�Property & Casualty
CEO:
Mr. Thomas Gayner
Total Employees:
20,300
Our Technological Advancement Rating
Our Rating:
-
-
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF MARKEL CORPORATION(MKL) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND INSURANCE�PROPERTY & CASUALTY INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
1181.38
One Month Price Target:
$1186.1
Six Month Price Target :
$1209.73
Likely Price in One Year's Time:
Ticker:
$1238.07
Likely Trading Range Today Under (Normal Volatility)
$1177.25
Price Upper limit ($) :
$1186.28
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$1127.19
This week:
$1060.21
This month :
$939.03
Other Primary facts
Market Cap:
16.05B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
13.53M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.06%
-19.83%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$1,432.88
$1,317.68
$929.88
$1,045.08
Medium risk (<10%) entry points
Buy Call
Sell Call
$1,280.19
Buy Put:
Sell Put:
$1,255.60
$1,082.25
$1,107.16
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
MKL
Sharpe Ratio:
1.06%
Comparison:
MKL, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -23.12% lower than the industry
& is -53.37% lower than the market/S&P 500 average
Average Returns/Yield of
MKL
Daily returns:
0.03%
Weekly returns:
0.16%
Monthly returns:
0.66%
Yearly returns:
10.43%
Comparison of returns:
Average annual returns/yield (last 3 years) is -24.59% below industry average
Classification:
MKL, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.92
Statistical test of Returns:
MKL has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.25%
Weekly Volatility:
5.03%
Monthly Volatility:
10.06%
Yearly Volatility:
34.85%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.09%
Volatility in last five trading days has been -51.64% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.59%
Weekly VaR:
-10.26%
Monthly VaR:
-20.51%
How Much Can the price of
MKL
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-18%
Worst case (decline):
-71.06%
This translates to price declining to:
$971.48
This translates to price declining to:
$341.86
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
MKL is a 44.79% riskier investment compared to the market/S&P 500 & is 24.04% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -6.57% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
MKL
Beta in relation to market/S&P 500--0.71
Expected beta in 1 year's time:
0.72
Expected beta in 3 year's time:
1.018
Unlevered (debt free) Beta:
0.574
Beta in relation to Nasdaq (XNAS):
0.766
Beta in relation to all global stocks::
0.929
Beta Comparison & Analysis
Beta of competitors/peers::
1.019
Beta is -29.91% lower than peers
Average Industry Beta:
0.555
Beta is 28.64% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
17.37%
Sustainable growth rate is 50.67% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.002
Alpha is -105.17% below industry average alpha yield
Alpha is -11% below the market average
Analysis of Cost of Capital of
MKL
Equity cost of capital:
0.080
Equity cost of capital is 15.66% above industry mean WACC
Unlevered (without debt) cost of capital:
6.46%
Before-tax cost of debt:
4.31%
After-tax cost of debt:
3.40%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.40%
WACC is 15.42% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$934.86
Revenue growth rate per share of (3Y):
1.1
Annual revenue growth rate is -0.70% below industry average
EPS:
$127.91
Expected Annual growth rate of EPS (3Y):
10.95%
Expected future EPS growth rate is -29.92% lower than the Insurance�Property & Casualty industry
Free cash flow (FCF) per share:
$157.98
-
-
Debt per share
$327.43
EBITDA per share
$197.70
Valuation Analysis Today of
MKL
P/E Ratio:
695.53
P/E Ratio of Competitors/Peers:
9.95
P/E ratio is 6890.28% higher than main peers & is 3875.16% higher than the industry
Stock price/value with industry average P/E ratio: $2,238.02
MKL is -47.21% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.26
Price to sales ratio is -47.32% below the industry mean
P/B (Price to book value ratio):
1.1
Price to free cash flow: 7.48
Price to free cash flow ratio is -51.05% lower than the industry
Net income growth rate (3Y):
-2013.17%
Net income growth rate is 6797.69% higher than the average industry net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
31.41%
Net debt to equity ratio:
3.81%
Debt to assets ratio:
9.04%
Net debt to assets ratio:
1.10%
Debt-to-asset ratio is -86.41% below industry average
Ability to repay debt:
Interest coverage ratio:
14.01
Interest coverage ratio is 190.92% more than industry average
Looking forward:
Debt growth rate:
25.18%
Annual debt growth is -1219% lower than industry average debt growth rate
Debt repayment rate in last quarter: 4.09%
Analysis of Key Statistics
Correlation of price movement with the market:
0.765
Statistical significance of correlation:
MKL has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.6
Stock price is 27.41% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.6
Correlation of price movement with Nasdaq (^IXIC):
0.048
Covariance of price movement with the market:
0.063
Kurtosis
14.717
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-0.742
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
MKL
Gross Profit Margin Ratio:
-
Operating Profit Margin Ratio:
25.65%
Operating profit margin is -505.41% lower than the industry
Net Profit Margin Ratio:
-
Effective Tax Rate:
22.16%
Effective tax rate is 10.89% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
12.75%
Return on equity (ROE) is 56.65% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.67%
Return on assets (ROA) is 139.55% higher than the industry
Financial Leverage:
1.1x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 4.4 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
622.9K
Each employee generates -48% less revenue than industry average revenue per employee
EBITDA generated per employee:
131.7K
Each employee generates -34% less EBITDA than industry average revenue per employee
Profit generated per employee:
88.6K
Each employee generates -37% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
17.9K
Each employee generates -70% less free cash flow than industry average revenue per employee
Assets/Capital per employee
0.0K
Each employee generates -70% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
MKL
FRANKLIN RESOURCES, INC. (XNYS:BEN)
Nomura Holdings, Inc. (XNYS:NMR)
LOEWS CORPORATION (XNYS:L)
EQUITABLE HOLDINGS, INC (XNYS:EQH)
RAYMOND JAMES FINANCIAL, INC. (XNYS:RJF)
SHINHAN FINANCIAL GROUP CO.,LTD (XNYS:SHG)
W. R. BERKLEY CORPORATION (XNYS:WRB)
apo MultiAsset Mandat Protect PB
ALLY FINANCIAL INC. (XNYS:ALLY)
Current Analyst Ratings
Strong buy�0%
Buy�4%
Hold�17%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
12.64B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
-
-
-
-
-
-
-
384.32M
190.88M
167.04M
2.67B
3.24B
1.80B
2.34B
517.66M
1.80B
Statement of Cash Flow
Date:
Period:
-
Differed Income Tax :
-
Stock Based Compensation :
-
Change in Working Capital :
-
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
464.79M
Net Cash Provided by Operating Activities:
414.87M
Investments in PP&E:
- 51696.00K
Net Acquisitions:
736.80M
Purchases of Investments:
- 917210.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
3.89B
14.39B
18.28B
9.88B
-
-
-
-
2.77B
1.77B
23.04B
-
-
-
48.99B
48.99B
7.42B
-
-
-
-
-
4.43B
-
4.43B
38.83B
34.40B
3.47B
10.28B
- 238567.0K
-
March 31, 2022 at 6:00:00 AM
10.31B
14.10B
48.50B
37.43B
4.43B
537.6M
196.33M
- 14204.00K
- 49976.00K
- 189031.00K
-
- 79296.00K
-
249.48M
- 18850.00K
- 19411.00K
326.64M
5.21B
4.88B
414.87M
- 51696.00K
363.18M
Our Proprietary Portfolio Rating
Our Rating:
-
Price Forecast/Expected Price in Next 5 Years of
MKL
2023
2024
2025
2026
2027
$1,244.26
$27,040.80
$28,338.42
$29,698.31
$31,123.46