Stock buybacks: Another one, at the right time

As promised in the previous post, here is another idea of a company that has taken advantage of their low priced stock by declaring stock buyback or repurchases. The company is Markel Corporation (MKL) which is a specialty insurance company modelled much like Berkshire Hathaway. Markel's investment division is run by Tom Gayner, who is a pure value manager.

It is not surprising that Markel decided to repurchase their stock in open market when the stock was at a long term low price to book ratio of 1.11.

Source: Ycharts

This repurchase transaction is a value enhancing action that is bound to increase the book value of Markel at exceedingly fast rates. Over years, as the price of Markel reverts back to the long term Price to book mean of 1.7, the shareholders will be generously rewarded.

Disclosure: I am an owner of Markel at the time of this writing.