1 Reason to Buy MKL

Key Points

• The so-called "baby Berkshire" isn't nearly as popular as its far larger namesake.

• Its business model is similar, although it's suffered some dings lately.

• 10 stocks we like better than Markel Group ›

While we can't categorize conglomerate Markel Group (NYSE: MKL) as a beaten-down stock, it certainly hasn't been an outperformer of late. While some peers in the finance and insurance sectors soared well higher over the past few years, it's risen modestly by comparison.

Yet management is working to streamline it back into the high performer that once earned it the tag of a "baby Berkshire" (referring to Warren Buffett's Berkshire Hathaway). I think that regeneration project is already yielding results.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Buffett junior?

Like Berkshire, Markel is anchored by insurance operations while holding stakes in fixed-income securities and publicly traded companies. It also, through Markel Ventures, manages a portfolio of privately held businesses.

Image source: Getty Images.

When the company's business model works, it works beautifully -- the insurance side of it is large, relatively steady, and potentially quite profitable. At times when the more up-and-down investments and Ventures are doing well, Markel's overall fundamentals can really jump. In leaner periods, the relatively steady insurance operations may serve to compensate.

The problem is, compared to its typical performance in years past, the insurance business has been relatively sluggish recently, and those investments weren't all that hot either.

Yet the transformation project seems to be having an impact. In the company's most recently reported quarter, the operating income from investments leaped more than eight times higher on a year-over-year basis to more than $822 million.

This, combined with a 17% improvement in that metric for Markel Ventures (to nearly $208 million), more than compensated for the 27% dive in the insurance segment to $128 million. All told, Markel's overall operating income for the quarter nearly tripled, to $1.1 billion from the year-ago tally of under $410 million.

That's one big ship

A sprawling insurance business can be tough to turn around, which is why it might take a bit of time to right the foundational Markel operating unit. Still, the company's reorganization and restructuring seems to be sprucing up operations, and I think insurance will soon follow. To me, that's plenty of reason to buy Markel stock now.

Should you invest $1,000 in Markel Group right now?

Before you buy stock in Markel Group, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Markel Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $653,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,119,863!*

Now, it’s worth noting Stock Advisor’s total average return is 1,060% — a market-crushing outperformance compared to 182% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 11, 2025

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Markel Group. The Motley Fool has a disclosure policy.