Adams Express: A Long-Term Quality Holding

| About: The Adams (ADX)

Adams Express Company is a closed end investment company that is more than 75 years old, trading on the New York Stock Exchange under the symbol ADX. I have written before about ADX and recently wrote about its sister fund, Petroleum and Resources (NYSE:PEO).

ADX buys and holds quality large-cap stocks and maintains a very stable portfolio, with minimal trading. It presently sells at over a 13% discount from net asset value, which only makes it more appealing. You could use ADX to replace the large-cap section of your portfolio.

It should be noted that Erik K. Bergstrom, who has no affiliation with the fund, has owned 9.2% of the outstanding shares. ADX owns in excess of 8% of the shares of its sister fund, Petroleum and Resources .

As of December 31, 2013, its 10 largest holdings constituted 23.3% of its total portfolio. These holdings are as follows:

Petroleum & Resources 4.5%
Apple 4.3
JP Morgan Chase 2.3
Lowe's 1.8
IBM 1.7
Wells Fargo 1.7
Microsoft 1.6
AT & T 1.6
Google 1.6

As of December 31, 2012, ADX had assets of $1,155,997,037. with leverage of 0.3% and almost no short-term assets. ADX is involved in an option writing and selling program which constitutes about 1.5% of assets. ADX had a cost basis in its common stock holdings of $1,010,947,838 which had a market value of $1,153,761,081. ADX has a broadly diversified portfolio.

The 5 year ratios show a fund with decent performance, a very low expense ratio, decent income and moderate turnover. These figures are as follow:

Market Price Return NAV Return Expense Ratio Income Turnover
2012 16.9% 14.7% 0.65% 1.54% 27.40%
2011 (4.2) (2.8) 0.55 1.25 21.50
2010 11.5 11.2 0.58 1.29 16.15
2009 32.1 30.6 0.90 1.30 15.05
2008 (38.9) (34.4) 0.48 1.82 18.00

The fund, like its sister PEO, has a managed distribution program of 6% of net assets annually. Management feels that its long-term shareholders require a steady source of income. Many individual families can trace their ownership of ADX back five generations.

This a quality fund which should be part of everyone's portfolio, especially when purchased at a substantial discount.

Disclosure: I am long ADX. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.