One of the patterns we like to see with insider buying is a long-serving Director of the company purchasing shares opportunistically. If that Director also happens to have an investing background, we like it even better. The cherry on the top is the company also buying back stock on the open market. We saw all these factors come together last week when Thomas Gayner purchased 5,000 shares of Cable One (CABO) for Markel (MKL). Investors that follow Berkshire Hathaway and Fairfax Financial are also familiar with the third leg of the trinity of holding companies, Markel. This interview by Barry Ritholtz of Thomas Gayner on his Masters in Business podcast provides an excellent overview of Markel and its Chief Investment Officer and Co-CEO, Thomas Gayner. The little exchange they have about Mr. Gayner, as a 22 year old, discovering Berkshire when the stock was trading at around $375 and not buying it until the stock had gotten to $5,750 was amusing.
So, it was 1984, I was 22 years old, and I — I went into Joe’s office and I said, “Hey, Joe, have you ever heard of this guy named Warren Buffett.” And Joe was sort of a crusty fella, and he says, “It’s a Buffett, you idiot, and threw me out.”
Well, I went to the cutting-edge technology of the day, which was the Standard & Poor’s tear sheet.
And I — and I looked at the Berkshire Hathaway page. And my training is as an accountant. I started out as a CPA with PricewaterhouseCoopers. And I looked at those numbers, and I could tell without resorting to four decimal point calculations, they were good.
Mr. Gayner has served on Cable One’s board since 2015, when the company was spun out of Graham Holdings (GHC). He has also served on Graham Holdings’ board for over 15 years. Graham Holdings currently holds education services company Kaplan and a group of other diverse businesses after selling Washington Post to Jeff Bezos in 2013, two years before the Cable One spinoff. Getting back to Cable One, the company announced an additional $450 million share buyback program last month. The prior repurchase program established in 2015, still has $75.4 million remaining. It is interesting to see the company choose to buyback shares instead of paying down its considerable debt.