Tom Gayner (Trades, Portfolio), the co-CEO of Markel Corp., disclosed his equity portfolio for the fourth quarter of 2022 last week.
Concentrating on promising areas where Markel has good understanding and knowledge, the guru’s Virginia-based firm uses a value-oriented approach to stock picking. Gayner also maintains a margin of safety within the investment portfolio and believes that since a stock is part of a business, it is worth what the present value of future cash flows are.
Keeping these ideas in mind, 13F filings show the guru established six new positions during the three months ended Dec. 31, sold out of three stocks and added to or trimmed a number of other existing holdings. His most notable trades included a new stake in Brookfield Asset Management Inc. (BAM, Financial), boosts to the Lockheed Martin Corp. (LMT, Financial) and Activision Blizzard Inc. (ATVI, Financial) positions, a reduction in the Regeneron Pharmaceuticals Inc. (REGN, Financial) holding and the divestment of Texas Pacific Land Corp. (TPL, Financial).
Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Brookfield Asset Management
The guru invested in 2.19 million shares of Brookfield Asset Management (BAM, Financial), allocating 0.84% of the equity portfolio to the stake. The stock traded for an average price of $30.09 per share during the quarter.
The Canadian alternative investment management company has a $13.84 billion market cap; its shares were trading around $33.38 on Monday with a price-earnings ratio of 34.03, a price-book ratio of 2.03 and a price-sales ratio of 16.12.
Following the December spinoff in which the original company changed its name to Brookfield Corp. (BN, Financial) and gave its name to the separated business, the stock has gained 4.13%.
Further, the GF Score of 19 out of 100, which typically indicates poor performance, may not accurately reflect its full potential as the company only received ratings for financial strength and profitability.
Gayner is currently the only guru invested in the stock with a 0.53% stake.
Lockheed Martin
The investor increased the Lockheed Martin (LMT, Financial) position by 418.85%, buying 45,500 shares. The transaction had an impact of 0.30% on the equity portfolio. Shares traded for an average price of $464.67 each during the quarter.
Gayner how holds 56,363 shares in total, which represent 0.37% of the equity portfolio. GuruFocus estimates he has gained 4.58% on the investment so far.
The aerospace and defense company, which is headquartered in Bethesda, Maryland, has a market cap of $118.96 billion; its shares were trading around $465.97 on Monday with a price-earnings ratio of 21.46, a price-book ratio of 12.77 and a price-sales ratio of 1.86.
The GF Value Line suggests the stock is modestly overvalued currently based on its historical ratios, past financial performance and analysts’ future earnings projections.
The GF Score of 90, however, indicates the company has high outperformance potential on the back of high ratings for profitability and growth as well as middling marks for financial strength, GF Value and momentum.
Of the gurus invested in Lockheed Martin, Yacktman Asset Management (Trades, Portfolio) has the largest holding with 0.13% of its outstanding shares. Catherine Wood (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), John Rogers (Trades, Portfolio) and several other gurus also have positions in the stock.
Activision Blizzard
Gayner upped the Activision Blizzard (ATVI, Financial) holding by 36.82%, buying 167,000 shares. The transaction impacted the equity portfolio by 0.17%. During the quarter, the stock traded for an average per-share price of $74.26.
He now holds a total of 620,600 shares, which occupy 0.64% of the equity portfolio. GuruFocus found he has gained around 9.51% on the investment since the second quarter of 2018.
The Santa Monica, California-based video game publisher, which is in the process of being acquired by Microsoft (MSFT, Financial), has a $56.87 billion market cap; its shares were trading around $72.67 on Monday with a price-earnings ratio of 34.12, a price-book ratio of 3.02 and a price-sales ratio of 7.76.
According to the GF Value Line, the stock is fairly valued currently.
The GF Score of 89 means the company has good outperformance potential. While it received high ratings for profitability, growth and financial strength, the GF Value and momentum ranks were more moderate.
With a 7.68% stake, Warren Buffett (Trades, Portfolio) is Activision Blizzard’s largest guru shareholder. PRIMECAP Management (Trades, Portfolio), First Pacific Advisors (Trades, Portfolio) and Jim Simons (Trades, Portfolio)’ Renaissance Technologies also have significant holdings.
Regeneron Pharmaceuticals
The guru slashed the Regeneron Pharmaceuticals (REGN, Financial) position by 62.02%, selling 49,800 shares. The transaction impacted the equity portfolio by -0.51%. During the quarter, the stock traded for an average price of $737.86 per share.
Gayner now holds a total of 30,500 shares, which account for 0.30% of the equity portfolio. According to GuruFocus data, he has gained an estimated 47.10% on the investment.
The biotech company headquartered in Tarrytown, New York has a market cap of $85.98 billion; its shares were trading around $789.48 on Monday with a price-earnings ratio of 28.46, a price-book ratio of 4.01 and a price-sales ratio of 6.54.
Based on the GF Value Line, the stock appears to be modestly overvalued currently.
The company has good outperformance potential with a GF Score of 81, driven by high ratings for profitability, growth and financial strength despite the low GF Value and momentum ranks.
Dodge & Cox is Regeneron’s largest guru shareholder with a 2.10% stake. Other top guru investors include the Vanguard Health Care Fund (Trades, Portfolio), Simons’ firm, Ray Dalio (Trades, Portfolio)’s Bridgewater Associates, Jeremy Grantham (Trades, Portfolio), Louis Moore Bacon (Trades, Portfolio) and Catherine Wood (Trades, Portfolio).
Texas Pacific Land
Gayner exited the 7,900-share holding of Texas Pacific Land (TPL, Financial), impacting the equity portfolio by -0.21%. Shares traded for an average price of $2,385.38 each during the quarter.
GuruFocus data shows he gained an estimated 61.53% on the investment over its lifetime.
The Dallas-based company, which leases land to oil and gas companies while retaining the mineral rights, has a $14.28 billion market cap; its shares were trading around $1,853.64 on Monday with a price-earnings ratio of 33.68, a price-book ratio of 19.81 and a price-sales ratio of 21.64.
The GF Value Line suggests the stock is fairly valued currently.
The GF Score of 93 means the company has high outperformance potential. It raked in high ratings for three of the criteria, but the GF Value rank was more moderate and momentum was low.
With a 19.35% stake, Murray Stahl (Trades, Portfolio) is Texas Pacific Land’s largest guru shareholder. David Rolfe (Trades, Portfolio) and Mario Gabelli (Trades, Portfolio) also own the stock.
Additional trades and portfolio composition
During the quarter, Gayner also curbed his holding of Enovis Corp. (ENOV, Financial) and boosted his positions in Cable One Inc. (CABO, Financial), Watsco Inc. (WSO, Financial), Old Dominion Freight Line Inc. (ODLF) and several other stocks.
The guru’s $7.46 billion equity portfolio, which is composed of 134 stocks, is largely invested in the financial services sector.
