GAMCO Investors, Inc. (GBL: NYSE) announced that Standard & Poor’s has
awarded its highest Platinum grade to the GAM Star GAMCO US Equity fund
and to GAMCO’s underlying Private Market Value with a Catalyst ™ (PMV)
stock selection strategy for the ninth year running.
Mario Gabelli, Chairman of GAMCO Investors, Inc. said, "Our global
analyst and portfolio investment team is very honored that our
fundamental PMV research driven stock selection process has extended its
S&P top rating streak to now include 2012.”
GAM Star GAMCO US Equity is one of only two funds among the 61 currently
rated in S&P’s America Sector, as of October 31, 2012, to receive the
Platinum grade. The fund was launched in July 2011 and its predecessor,
GAM GAMCO Equity initiated in October 1987.
The S&P Platinum grade is a widely acknowledged measure of excellence,
awarded only when, in S&P’s words:
The fund demonstrates the highest standards of quality in its sector
based on its investment process and management’s consistency of
performance as compared to funds with similar objectives.
In affirming the Platinum grade for the fund, S&P stated:
Gabelli's experience as an investor, together with a solid long-term
track record which has been built by adhering to a disciplined process,
supports the retention of the fund's S&P Capital IQ Platinum grading.
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The following is excerpted from S&P’s Platinum grade report dated
January 21, 2013:
Gabelli is a highly experienced investor who has acquired a wealth of
knowledge during his 45-year investment career. He is supported by a
well-resourced team of 34 equity analysts who are guided by his thematic
and sector views when conducting their bottom-up driven research. This
leads to biases to certain industries, such as media (+11.2% relative to
benchmark) and capital goods (+10.7%), and is a reflection of the fact
that portfolio construction is carried out with little regard to its
benchmark. A diversified portfolio of 100-150 positions is therefore
important to control risk.
In the last 18 months, there has been a particular emphasis on the
financial engineering activities of companies, which has led to new
investments in firms such as DE Master Blenders 1753 and Fortune Brands
Home and Security. These were spun out of Sara Lee (now known as
Hillshire Brands Company), and Fortune Brands (now known as Beam),
respectively. Gabelli has also benefited from an increasing trend of
companies looking to convert to Reit status with Ryman Hospitality
Properties – formed following Gaylord Entertainment's decision to pursue
this process - an example of this.
GAMCO's team of global equity research analysts is broadly split
between seven sector categories: aerospace and capital goods; consumer;
health; energy and utilities; media and telecoms; natural resources; and
financial services. One of four senior analysts leads on at least one of
these sector groups.
Analysts follow their sectors on a global basis and are responsible
for the gathering, arraying and projection of company data for making
investment decisions. Experience in the team varies considerably. The
majority of the analysts are US-based, with the rest in London, Hong
Kong, Tokyo and Shanghai.
On the Fund’s Management style, S&P wrote:
The bottom-up, value-driven investment process employed by Mario
Gabelli is founded on the principles of Graham & Dodd, where the
emphasis is on investing in undervalued stocks that have a high
probability of achieving their intrinsic or private market value (PMV)
over time through the intervention of a discernible catalyst.
The PMV is defined as the value that Gabelli believes an informed
investor would be willing to pay to own the entire company. Catalysts
could be a specific event (M&A and management changes) or be
sector-related (regulatory changes and industry consolidation) with
varying time horizons.
Research is focused around themes that reflect Gabelli's areas of
interest and expertise. There will often be a bias to industries, such
as media, where a wealth of industry data can be used to compare asset
values. Fundamental analysis helps to highlight companies with a strong
franchise, shareholder friendly management and the ability to generate
sustainable free cash flow. Meeting company management is a key part of
the process, and the team makes more than 1,000 on-site visits a year.
To determine whether valuations are attractive, analysts estimate the
direction and growth rates of EBITDA, cash flow and earnings, as well as
the company's PMV. The best opportunities tend to be found in the
under-researched small-/mid-cap stocks. Positions are built gradually
according to conviction, with the average holding period being three to
five years. Turnover is very low, as the team is prepared to wait for
catalysts to materialise.
Since the final portfolio of 100-150 positions is built from a purely
bottom-up basis, there is little regard paid to the benchmark S&P 500
index. While deviations at the stock and sector level are unconstrained,
individual positions are usually capped at 5%, with the top 10 holdings
comprising 25-30% of the fund. Risk is largely controlled through the
construction of a broadly diversified portfolio.
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GAM Star GAMCO US Equity was awarded a Platinum grading (previously
categorized as AAA) in November 2011. GAM GAMCO Equity was rated AAA by
S&P from October 2004 to October 2011. GAM Star GAMCO US Equity – USD
Class was seeded by the transfer of the holdings of GAM GAMCO Equity on
27 July 2011. GAM Star GAMCO US Equity – USD Class has inherited the
performance and price history of GAM GAMCO Equity, which incepted on 20
October 1987. All references to price and performance for periods to 27
July 2011 refer to the performance of GAM GAMCO Equity. GAM GAMCO Equity
is a company established in the British Virgin Islands structured to
operate in a similar way to an open-ended unit trust and had the
same investment objective and policy as GAM Star GAMCO US Equity. The
fund has been sub-advised by GAMCO Asset Management Inc. (a subsidiary
of GAMCO Investors, Inc) for GAM, continuously since October 1987.
Standard & Poor’s is a globally recognized provider of objective fund
information as well as ratings on debt securities; a leading authority
in the investment world. S&P’s fund evaluation process is based on an
in-depth analysis of both the quantitative and qualitative factors
considered to be key contributors to long-term investment performance.
These include the historic performance, volatility and portfolio
construction of a fund; the manager’s investment process, risk control,
skill, experience and resources; and the group’s corporate management,
investment culture and stability.
GAMCO Investors, Inc., through its subsidiaries, manages private
advisory accounts (GAMCO Asset Management Inc.), mutual funds and
closed-end funds (Gabelli Funds, LLC), and partnerships and offshore
funds (Gabelli Securities, Inc.). As of December 31, 2012, GAMCO had
$36.4 billion in assets under management.
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SPECIAL NOTE REGARDING FORWARD-LOOKING
INFORMATION
Our disclosure and analysis in this press release contain some
forward-looking statements. Forward-looking statements give our current
expectations or forecasts of future events. You can identify these
statements because they do not relate strictly to historical or current
facts. They use words such as “anticipate,” “estimate,” “expect,”
“project,” “intend,” “plan,” “believe,” and other words and terms of
similar meaning. They also appear in any discussion of future operating
or financial performance. In particular, these include statements
relating to future actions, future performance of our products,
expenses, the outcome of any legal proceedings, and financial results.
Although we believe that we are basing our expectations and beliefs on
reasonable assumptions within the bounds of what we currently know about
our business and operations, there can be no assurance that our actual
results will not differ materially from what we expect or believe. Some
of the factors that could cause our actual results to differ from our
expectations or beliefs include, without limitation: the adverse effect
from a decline in the securities markets; a decline in the performance
of our products; a general downturn in the economy; changes in
government policy or regulation; changes in our ability to attract or
retain key employees; and unforeseen costs and other effects related to
legal proceedings or investigations of governmental and self-regulatory
organizations. We do not undertake to update publicly any
forward-looking statements if we subsequently learn that we are unlikely
to achieve our expectations or if we receive any additional information
relating to the subject matters of our forward-looking statements.
