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I’m a little late looking at earnings, but I wanted to make sure I reviewed the progress of Markel (NYSE:MKL) to check it with my investment thesis. The company's third quarter demonstrated the investment gains that were expected as book value rose from $222 per share at year-end 2009 to $274 per share at the end of the third quarter, a 23% increase.

Markel's underwriting profits also remained positive for the third quarter and its nine months ending 9/30/09 with a combined ratio of 96% and 97% for the two periods respectively. Net income was $6.02 per share for the quarter and $11.02 for the nine month period.

Looking ahead to full year results, I expect further improvements in Markel's investment portfolio and continued underwriting profits. At its more historical price/book ratio of 2.0x, the company would have a valuation of $548 per share.

A stable investment environment should benefit the company and its shares, as it continues to trade at a significant discount to its historical valuation range. Couple this with the company’s long-term growth in shareholder equity, and Markel looks like quite an investment.

Disclosure: I hold shares of Markel

Source: Why Markel Shares Have So Much Upside