MKL

Markel is a Berkshire-style specialty insurance and holding company whose value engine is book-value compounding, not headline earnings. FY2025 revenue rose 4.7% to $15.5B and operating cash flow grew 6.4% to $2.76B, while stockholders' equity climbed 9.9% to $18.6B and retained earnings advanced 12.4% to $15.0B — the durable signs of a business that retains and reinvests capital well. At a $23.2B market cap, the stock trades around 1.25x book, with a P/E of 10.9 and P/S of 1.5 — a full-to-modest discount for a franchise of this quality.

The hesitation is profitability. FY2025 net income fell 23.3% to $2.11B, operating income dropped 13.9% to $3.19B, and diluted EPS slid 15.1% to $169.22, pulling ROE down to a modest 11.3%. The five-year history underscores that insurance earnings are lumpy — net income swung from $2.42B (FY2021) to a -$216M loss (FY2022) before recovering — so a single down year is not a thesis-breaker, but it does mean the 10.9x P/E rests on a depressed earnings base, leaving less of a valuation cushion than the multiple suggests.