Mario J. Gabelli founded GAMCO Investors, Inc. in 1977 and since then has built its holding to over $13 billion. Following the Graham and Dodd investment philosophy, GAMCO entered 2013 with high hopes for its top 5 holdings which are as follows:
The largest GAMCO investment at year end 2012 was in Directv (NASDAQ:DTV). In the fourth quarter, GAMCO sold 5% of this position bring it down to 1.78% of the funds holdings. While 1.78% may seem insignificant, this amounts to a quarter of a billion dollars in a fund that has close to 800 different holdings. In the period sold, Directv fell from its high of $54 to as low as $48, it currently trades at $51.92 per share. Directv has a $29.38 billion market cap which is close to the $29.74 billion in sales it had last year. Paying no dividend, DTV currently has a P/E of 11.15 and profit margin of 10%.
Second on the list is its holdings in American Express (NYSE:AXP), which I previously wrote about here. American Express has been rising significantly and they currently trade at 52 week highs of $65.20 per share. American Express pays a 1.23% dividend and has steadily been buying back its own shares. From its 2007 lows, American Express has managed to slowly decrease its charge-off rates and deliver consistent earnings. AXP has a market cap of $72 billion which is supported by its 13.26% profit margin.
GAMCO's third largest holding at year end was in Ryman Hospitality Properties (NYSE:RHP). This was a new purchase for GAMCO and looking at the graph below makes me think Mr. Gabelli wished he had purchased more because RHP is up over 15% this year. Ryman Hospitality is a $2.34 billion company that pays a healthy 4.5% dividend however.
Coming in slightly below the amount valued on its Ryman Hospitality holdings is GAMCO's fourth largest position in National Fuel and Gas Co. (NYSE:NFG). National Fuel and Gas has also done well for GAMCO by returning over 17% YTD. At $59.06 per share, NFG seems pretty heavy to me. With a market cap of $4.97 billion, NFG had only $192 million in sales last year. Other indications that shares are fully priced are the price target of $60.29 (2% above current price) and high forward P/E of 21.02. Either way, NFG appears to have made GAMCO some money.
Last on GAMCO's top 5 are its two holdings in Viacom's (NASDAQ:VIAB) A and B preferred shares (common shown below). Like the common shares, both A and B preferreds have moved up in 2013. Preferred As trade at $48.6 per share , up 21% YTD and the B Preferreds trade at $47.2 per share which is up 19% YTD. Viacom is a $30.66 billion company that is currently valued with a forward P/E of 11.51. VIAB pays a 1.78% dividend to shareholders and commands a healthy 17.10% profit margin.