19 Dec 2012 Markel Bags a Whale ( Portfolio )
With echoes of Berkshire Hathaway's (NYSE: BRK-A)(NYSE: BRK-B) 2009 Burlington Northern deal, Markel (NYSE: MKL) this morning announced its largest acquisition to date with a $3 billion cash and stock agreement to buy rival Alterra Capital Holdings (NASDAQ: ALTE).
03 Dec 2012 For Buffett, the Long Run Still Trumps the Quick Return ( Portfolio )
“You can’t buy 10 percent of the farmland in Nebraska in three years if you set out to do it,” he said. Yet, he pointed out, he was able to buy the equivalent of 10 percent of I.B.M. in six to eight months as a result of the market’s liquidity. “The idea that people look at their holdings in such a way that that kind of volume exists means that to a great extent, it’s a casino game,” he said. Of course, unlike many investors, he plans to hold his stake in I.B.M. for years.
29 Nov 2012 Meridian Value - Q3 2012 Commentary ( Portfolio )
We continue to seek out-of-favor companies, typically having experienced an extended period of declining earnings. In recent years, most earnings problems have been related to poor economic conditions. With some stability in the economy, albeit tenuous, we now see more companies that meet our strategy for company-specific reasons. These investments are the traditional strength and point of differentiation of the Meridian Value Fund. We are gradually shifting the portfolio to more of these investments and believe that this should bode well for a return to the Fund’s historically strong performance levels. The Fund is invested in 53 positions, representing 34 industry groups along with Treasury Bills. We continue to invest in companies of all market capitalizations and our largest areas of concentration are technology, retail and transportation.
During the quarter we purchased shares of Aeropostale, Flowers Foods, Gildan Activewear, Koninklijke Phillips, and Verint Systems. We sold our positions in Cummins, CVB Financial Group, Host Hotels & Resorts, Lincoln Electric and TD Ameritrade. One of our newest holdings, Matson, is the result of a spin-off from our holding of Alexander & Baldwin, Inc.
GATX Corporation is one of our largest holdings. The company specializes in owning and leasing long lived, widely used transportation assets that have a valuable service component. The majority of GATX’s business is in the railcar leasing market, particularly tank cars used to transport chemicals, petroleum or food and agriculture products. The company suffered declining earnings due to the weak macroeconomic environment as long term leases signed during better times expired and were renewed at lower rates during the recent downturn and early stages of the current recovery. Earnings growth turned positive as under-production of tank cars during the economic downturn, coupled with improved demand for railcars as the economy stabilized, resulted in favorable supply and demand conditions. Demand is now augmented by secular growth in domestic production of oil and chemicals, with the latter driven by expectations for increased domestic production of low priced natural gas. GATX is well managed, in our opinion, and trades at a reasonable valuation based on normalized earnings per share, which we believe could exceed $3.50 per share if current trends persist. In addition the shares have an attractive 2.8% dividend yield.