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General American Investors (GAM) was formed in 1927 while Adams Express (ADX) started up in 1929. They have stood the test of time. GAM focuses more on growth stocks while ADX is more of a conservative, blue-chip oriented fund.

Here were the top 10 holdings for each of them as of last September 30:
General American Investors - GAM
Adams Express Company - ADX
TJX Companies (TJX)
Petroleum and Resources (PEO)
Weatherford International (WFT)
Microsoft (MSFT)
Costco Wholesale (COST)
General Electric (GE)
Qualcomm Inc. (QCOM)
Unilever plc (UL)
Oracle (ORCL)
Apache Corp. (APA)
PepsiCo (PEP)
Wal-Mart Stores (WMT)
Cisco Systems (CSCO)
Republic Services (RSG)
JP Morgan Chase (JPM)
CEMEX SA (CX)
Bank of America (BAC)
ABB Ltd. (ABB)
United Technologies (UTX)
Top 10 holdings = 37.9% of portfolio
Top 10 holdings = 24.9% of portfolio
As of the December 30. 2009 close GAM had a net asset value of $27.78 and a market price of $23.50 for a discount of 15.41%. Adams Express had an NAV of $12.06 and a closing price of $10.14 for a discount of 15.92%.
Are these 15 – 16% discounts better or worse than typical for these funds? Here are the past years’ average discounts as reported by Value Line:
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
GAM
10%
9%
6%
7%
10%
11%
11%
8%
9%
13%
ADX
17%
12%
10%
12%
12%
13%
14%
14%
14%
16%

The current discount on GAM is well better its 10-year average discount of 9.3% and is now the highest of the past decade. General American has posted a reasonable expense ratio of about 0.9% over the past 10 years. General American has nicely outperformed the S&P 500 over the past 1, 5, 10 and 20 years.

Adam Express’s current 19.92% discount is close its highest during the past decade. Adams Express has shown an extremely low 0.4% expense ratio over the 10 years. If you believe it’s time for large-cap, high quality stocks to being outperforming this fund looks like a good choice.

CEFs offer some distinct advantages over their open-ended brethren. General American Investors has shown solid results for its better than 80 year history and offers a discounted way to play ‘growth stocks’.

Adams Express also has more than 80 years of fund management expertise and offers rock bottom expenses along with the chance for nice future returns in the big-cap, blue chip arena. The dividend yield alone on ADX shares is now above 2.5% and they generally pay decent capital gains distributions each year as well.

Disclosure: Long GAM & ADX

Source: 2 Closed-End Funds Worth Considering Now