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 (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 (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 (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. (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 (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.