Among the gurus we track at GuruFocus, Warren Buffett’s Berkshire Hathaway, Prem Watsa’s Fairfax Financial, Tom Gayner’s Markel Corp., and David Einhorn’s Greenlight Re are all heavily involved in insurance and reinsurance business. As equity investors of insurance companies, these gurus need to invest conservatively but still achieve acceptable returns. Therefore, they tend to invest in the companies that have limited downside risk, but may still generate above average returns. We have discussed thoroughly the stocks that are owned by Warren Buffett. In this article, we would like to look into the stocks that both Markel Corp. and Fairfax Financial Own.
Markel Corp.’s investment portfolio is managed by a group of investors led by Tom Gayner. Tom Gayner is the executive vice president and chief investment officer of Markel Corp. and president, Markel Gayner Asset Management Inc., the investment subsidiary of Markel Corp. According to recent comment from Gayner, they had a fantastic year on the equity side, up 20% vs. 15% on the S&P; up 6.2% over the last 5 years vs. 2.1%; and up 7.6% for the last 10 years vs. 1.1%. Gayner commented on what investment areas he currently finds attractive:
Fairfax’s investment portfolio is managed by a team led by Prem Watsa. Mr. Watsa is an astute businessman and a great investor. He not only successfully guided Fairfax through the years of the financial crisis, but also benefited handsomely from it. His company has grown the book value of the business by more than 20% for 25 years. His investment returns are even more impressive. Fairfax equity portfolio averaged 14.2% annually over the last 5 years while the market averaged only 2.3% a year, and 17.9% over the past 10 years while the S&P500 returned only 1.4% a year.
Therefore, it is interesting to check out the common stock holdings of the two great investors, Tom Gayner and Prem Watsa. These are the stocks that both of them own:
Berkshire Hathaway (BRK.A, Financial) (BRK.B, Financial)
Both Tom Gayner and Prem Watsa own both Berkshire A shares and B shares. Tom Gayner owns 941 shares of BRK.A and 1,578,847 shares of BRK.B. These shares are valued at about $250 million, which accounts for 13.4% of his equity portfolio. Prem Watsa owns 6 shares of BRK.A and 6000 shares of BRK.B. The total value is only about $1.2 million. Both Tom Gayner and Prem Watsa were adding to Berkshire positions
It is not surprising that both of them own Berkshire shares, as they are in a similar business as the main business of Berkshire Hathaway. Above all, Berkshire is run by the greatest investor of our time, Warren Buffett. Berkshire Hathaway has a market cap of $209.98 billion.
As pointed out by Warren Buffett in his latest shareholder letter, Berkshire has grown the book value per share of the company from $66 a share in 1970 to $94,730 a share today. For the 30 years from 1970 to 2000, Berkshire book value grew at about 25% a year. The rate of growth was 6.6% in the years from 2000 to 2010.
Two weeks ago Berkshire announced the intent of the acquisition of Luzbrizol for a deal of close to $10 billion. In a statement, Buffett noted the two factors that influenced him to purchase the additives corporation. “Lubrizol is exactly the sort of company with which we love to partner—the global leader in several market applications run by a talented CEO, James Hambrick. Our only instruction to James—just keep doing for us what you have done so successfully for your shareholders,” Buffett said.
Our analysis shows that Berkshire probably paid a close to fair value for the company.
WalMart Stores Inc. (WMT, Financial)
Tom Gayner owns 986,795 shares of WMT, valued as $53 million as of Dec. 31, 2010, which accounts for 2.97% of his equity portfolio. Prem Watsa owns 220,000 shares of WMT, valued as $12 million as of Dec. 31, 2010, which accounts for 0.47% of his equity portfolio.
WalMart Stores Inc. has a market cap of $185.22 billion; its shares were traded at around $52 with a P/E ratio of 12.7 and P/S ratio of 0.4. The dividend yield of Walmart Stores Inc. stocks is 2.8%. Walmart Stores Inc. had an annual average earnings growth of 11.1% over the past 10 years. GuruFocus rated Walmart Stores Inc. the business predictability rank of 5-star.
WalMart is one of the stocks that Tom Gayner keeps buying. It is one of the “global blue chip brand name companies” he has favored.
Prem Watsa started buying WalMart in 2007. He bought 227,000 shares and has kept the position unchanged since.
Walmart recently announced a deal with South Africa’s biggest retailer Massmart. The deal gives the giant U.S. retailer a presence in poor but fast-growing Africa. The deal is now under review by the regulators.
Johnson & Johnson (JNJ, Financial)
Tom Gayner owns 561,995 shares of JNJ, valued as $35 million as of Dec. 31, 2010, which accounts for 1.94% of his equity portfolio. Prem Watsa owns 6,884,300 shares of JNJ, valued as $426 million as of Dec. 31, 2010, which accounts for 16.78% of his equity portfolio.
Johnson & Johnson is engaged in the manufacture and sale of a broad range of products in the health care field in many countries of the world. Johnson & Johnson has a market cap of $160.8 billion; its shares were traded at around $58.79 with a P/E ratio of 12.4 and P/S ratio of 2.6. The dividend yield of Johnson & Johnson stocks is 3.7%. Johnson & Johnson had an annual average earnings growth of 9.3% over the past 10 years. GuruFocus rated Johnson & Johnson the business predictability rank of 4-star.
Again JNJ is the blue chip with global brand names that Tom Gayner likes. JNJ is also the largest position with Prem Watsa. In Fairfax’s 2008 annual letter to the shareholders, Prem Watsa felt that, “Johnson & Johnson has perhaps the best long term track record we have come across. They have compounded sales and earnings for the last 100 years in excess of 10% per year. The growth prospects for their products on a worldwide basis are unlimited.”
In February, JNJ acquired Crucell in a tender offer. Crucell is a global biopharmaceutical company focused on research development, production and marketing of vaccines, proteins and antibodies that prevent and/or treat infectious diseases. Apparently JNJ tries to increase its portfolio of product lines.
Some of the JNJ shareholders wrote an open letter to the company. We have yet to hear from the company.
Brown & Brown, Inc.. (BRO, Financial)
Tom Gayner owns 365,628 shares of BRO, valued as $9 million as of Dec. 31, 2010, which accounts for 0.49% of his equity portfolio. Prem Watsa owns 12,000 shares of BRO, valued as $0 million as of Dec. 31, 2010, which accounts for 0.01% of his equity portfolio. Neither Tom Gayner nor Brown & Brown Inc. and its subsidiaries offer a broad range of insurance and reinsurance products and services, as well as risk management, third party administration, managed health care and Medicare set-aside services and programs. Brown & Brown Inc. has a market cap of $3.55 billion; its shares were traded at around $24.88 with a P/E ratio of 22.1 and P/S ratio of 3.7. The dividend yield of Brown & Brown Inc. stock is 1.3%. Brown & Brown Inc. had an annual average earnings growth of 10.9% over the past 10 years.
Brown & Brown Regional Executive VP Michael J. Riordan bought 3,261 shares of BRO stock on 11/24/2010 at the average price of 23. Michael J. Riordan owns at least 15,135 shares after this. The price of the stock has increased by 8.17% since.
Brown & Brown reported net income of $161.8 million, or $1.12 a share, for 2010, compared with net income of $153.3 million, or $1.08 a share, for 2009.
AbitibiBowater Inc. (ABH, Financial)
Tom Gayner owns 85,392 shares of ABH, valued as $2 million as of Dec. 31, 2010, which accounts for 0.11% of his equity portfolio. Prem Watsa owns 13,234,217 shares of ABH, valued at $313 million as of Dec. 31, 2010, which accounts for 12.35% of his equity portfolio.
AbitibiBowater Inc. is engaged in the production of newsprint and coated and specialty papers. Abitibibowater has a market cap of $1.48 billion; its shares were traded at around $27.03.
Abitibibowater seems to be an asset play for Prem Watsa. As reported in our Real Time Picks for Premium Members, Prem Watsa has continuously added into Abitibibowater. Fairfax owns close to 17 million shares of Abitibibowater as of last week.
According to a presentation on the Abitibowater website, the company currently
focuses on paper grades that have and are expected to offer higher returns on capital, while reducing our relative exposure to lower return grades. The company has been selling assets to reduce debt and strengthen its financial situations.
To check the consensus holdings of any combination of your favorite Gurus, please go to Aggregated Portfolio of Gurus. This is one of the features that GuruFocus offers to Premium Members of GuruFocus. If you are not a Premium Member, why not Take a 7-Day Free Trial?
Markel Corp.’s investment portfolio is managed by a group of investors led by Tom Gayner. Tom Gayner is the executive vice president and chief investment officer of Markel Corp. and president, Markel Gayner Asset Management Inc., the investment subsidiary of Markel Corp. According to recent comment from Gayner, they had a fantastic year on the equity side, up 20% vs. 15% on the S&P; up 6.2% over the last 5 years vs. 2.1%; and up 7.6% for the last 10 years vs. 1.1%. Gayner commented on what investment areas he currently finds attractive:
- Same place as he has been for a few years and that is global blue chip brand name companies.
- Had a really good 2010 despite not being invested in smaller caps but was instead in high quality.
- Thinks commodities might sprint ahead this year but he isn’t chasing as Markel are marathoners not sprinters.
- Will continue to put new money into the best franchises in the world if prices stay the same.
Fairfax’s investment portfolio is managed by a team led by Prem Watsa. Mr. Watsa is an astute businessman and a great investor. He not only successfully guided Fairfax through the years of the financial crisis, but also benefited handsomely from it. His company has grown the book value of the business by more than 20% for 25 years. His investment returns are even more impressive. Fairfax equity portfolio averaged 14.2% annually over the last 5 years while the market averaged only 2.3% a year, and 17.9% over the past 10 years while the S&P500 returned only 1.4% a year.
Therefore, it is interesting to check out the common stock holdings of the two great investors, Tom Gayner and Prem Watsa. These are the stocks that both of them own:
| Symbol | Tom Gayner | Prem Watsa | ||||
| Share | Value ($1000s) | Change | Share | Value ($1000s) | Change | |
| BRK.B | 1,578,847 | 126,481 | 0.64% | 6,000 | 481 | 0% |
| BRK.A | 941 | 113,344 | 5.02% | 6 | 718 | 0% |
| WMT | 986,795 | 53,218 | 5.79% | 220,000 | 11,865 | 0% |
| JNJ | 561,995 | 34,759 | 0.77% | 6,884,300 | 425,725 | 0% |
| BRO | 365,628 | 8,753 | 0% | 12,000 | 287 | 0% |
| ABH | 85,392 | 2,021 | 10000% | 13,234,217 | 313,254 | 10000% |
Berkshire Hathaway (BRK.A, Financial) (BRK.B, Financial)
Both Tom Gayner and Prem Watsa own both Berkshire A shares and B shares. Tom Gayner owns 941 shares of BRK.A and 1,578,847 shares of BRK.B. These shares are valued at about $250 million, which accounts for 13.4% of his equity portfolio. Prem Watsa owns 6 shares of BRK.A and 6000 shares of BRK.B. The total value is only about $1.2 million. Both Tom Gayner and Prem Watsa were adding to Berkshire positions
It is not surprising that both of them own Berkshire shares, as they are in a similar business as the main business of Berkshire Hathaway. Above all, Berkshire is run by the greatest investor of our time, Warren Buffett. Berkshire Hathaway has a market cap of $209.98 billion.
As pointed out by Warren Buffett in his latest shareholder letter, Berkshire has grown the book value per share of the company from $66 a share in 1970 to $94,730 a share today. For the 30 years from 1970 to 2000, Berkshire book value grew at about 25% a year. The rate of growth was 6.6% in the years from 2000 to 2010.
Two weeks ago Berkshire announced the intent of the acquisition of Luzbrizol for a deal of close to $10 billion. In a statement, Buffett noted the two factors that influenced him to purchase the additives corporation. “Lubrizol is exactly the sort of company with which we love to partner—the global leader in several market applications run by a talented CEO, James Hambrick. Our only instruction to James—just keep doing for us what you have done so successfully for your shareholders,” Buffett said.
Our analysis shows that Berkshire probably paid a close to fair value for the company.
WalMart Stores Inc. (WMT, Financial)
Tom Gayner owns 986,795 shares of WMT, valued as $53 million as of Dec. 31, 2010, which accounts for 2.97% of his equity portfolio. Prem Watsa owns 220,000 shares of WMT, valued as $12 million as of Dec. 31, 2010, which accounts for 0.47% of his equity portfolio.
WalMart Stores Inc. has a market cap of $185.22 billion; its shares were traded at around $52 with a P/E ratio of 12.7 and P/S ratio of 0.4. The dividend yield of Walmart Stores Inc. stocks is 2.8%. Walmart Stores Inc. had an annual average earnings growth of 11.1% over the past 10 years. GuruFocus rated Walmart Stores Inc. the business predictability rank of 5-star.
WalMart is one of the stocks that Tom Gayner keeps buying. It is one of the “global blue chip brand name companies” he has favored.
Prem Watsa started buying WalMart in 2007. He bought 227,000 shares and has kept the position unchanged since.
Walmart recently announced a deal with South Africa’s biggest retailer Massmart. The deal gives the giant U.S. retailer a presence in poor but fast-growing Africa. The deal is now under review by the regulators.
Johnson & Johnson (JNJ, Financial)
Tom Gayner owns 561,995 shares of JNJ, valued as $35 million as of Dec. 31, 2010, which accounts for 1.94% of his equity portfolio. Prem Watsa owns 6,884,300 shares of JNJ, valued as $426 million as of Dec. 31, 2010, which accounts for 16.78% of his equity portfolio.
Johnson & Johnson is engaged in the manufacture and sale of a broad range of products in the health care field in many countries of the world. Johnson & Johnson has a market cap of $160.8 billion; its shares were traded at around $58.79 with a P/E ratio of 12.4 and P/S ratio of 2.6. The dividend yield of Johnson & Johnson stocks is 3.7%. Johnson & Johnson had an annual average earnings growth of 9.3% over the past 10 years. GuruFocus rated Johnson & Johnson the business predictability rank of 4-star.
Again JNJ is the blue chip with global brand names that Tom Gayner likes. JNJ is also the largest position with Prem Watsa. In Fairfax’s 2008 annual letter to the shareholders, Prem Watsa felt that, “Johnson & Johnson has perhaps the best long term track record we have come across. They have compounded sales and earnings for the last 100 years in excess of 10% per year. The growth prospects for their products on a worldwide basis are unlimited.”
In February, JNJ acquired Crucell in a tender offer. Crucell is a global biopharmaceutical company focused on research development, production and marketing of vaccines, proteins and antibodies that prevent and/or treat infectious diseases. Apparently JNJ tries to increase its portfolio of product lines.
Some of the JNJ shareholders wrote an open letter to the company. We have yet to hear from the company.
Brown & Brown, Inc.. (BRO, Financial)
Tom Gayner owns 365,628 shares of BRO, valued as $9 million as of Dec. 31, 2010, which accounts for 0.49% of his equity portfolio. Prem Watsa owns 12,000 shares of BRO, valued as $0 million as of Dec. 31, 2010, which accounts for 0.01% of his equity portfolio. Neither Tom Gayner nor Brown & Brown Inc. and its subsidiaries offer a broad range of insurance and reinsurance products and services, as well as risk management, third party administration, managed health care and Medicare set-aside services and programs. Brown & Brown Inc. has a market cap of $3.55 billion; its shares were traded at around $24.88 with a P/E ratio of 22.1 and P/S ratio of 3.7. The dividend yield of Brown & Brown Inc. stock is 1.3%. Brown & Brown Inc. had an annual average earnings growth of 10.9% over the past 10 years.
Brown & Brown Regional Executive VP Michael J. Riordan bought 3,261 shares of BRO stock on 11/24/2010 at the average price of 23. Michael J. Riordan owns at least 15,135 shares after this. The price of the stock has increased by 8.17% since.
Brown & Brown reported net income of $161.8 million, or $1.12 a share, for 2010, compared with net income of $153.3 million, or $1.08 a share, for 2009.
AbitibiBowater Inc. (ABH, Financial)
Tom Gayner owns 85,392 shares of ABH, valued as $2 million as of Dec. 31, 2010, which accounts for 0.11% of his equity portfolio. Prem Watsa owns 13,234,217 shares of ABH, valued at $313 million as of Dec. 31, 2010, which accounts for 12.35% of his equity portfolio.
AbitibiBowater Inc. is engaged in the production of newsprint and coated and specialty papers. Abitibibowater has a market cap of $1.48 billion; its shares were traded at around $27.03.
Abitibibowater seems to be an asset play for Prem Watsa. As reported in our Real Time Picks for Premium Members, Prem Watsa has continuously added into Abitibibowater. Fairfax owns close to 17 million shares of Abitibibowater as of last week.
According to a presentation on the Abitibowater website, the company currently
focuses on paper grades that have and are expected to offer higher returns on capital, while reducing our relative exposure to lower return grades. The company has been selling assets to reduce debt and strengthen its financial situations.
To check the consensus holdings of any combination of your favorite Gurus, please go to Aggregated Portfolio of Gurus. This is one of the features that GuruFocus offers to Premium Members of GuruFocus. If you are not a Premium Member, why not Take a 7-Day Free Trial?
