INVESTMENT SCORECARD
The Fund’s largest position, Sony (+14%, 8.6% of net assets as of December 31, 2021), was also its largest contributor to returns for the fourth quarter as the company continues to benefit from its focus on attractive end markets including games, music and sensors. With inflation a focus certain holdings with pricing power or the ability to act as inflation conduits performed well. This included waste collection company Republic Services (+17%, 4.4%), distributor Genuine Parts (+16%, 3.2%) and distilled spirits maker Diageo (+14%, 3.8%). Resource-based companies behaved similarly with gold miner Newmont (+15%, 6.1%) and utility/natural gas E&P National Fuel Gas (+23%, 3.1%) contributing strongly. Finally, Edgewell Personal Care (+26%, 1.1%) has finally seen the demand for razors stabilize and its operational improvements come to fruition.
Media stocks were challenged for a variety of reasons in Q4. ViacomCBS (-20%, 5.5%), Grupo Televisa (-15%, 1.7%), AMC Networks (-26%, 0.2%) and Sinclair Broadcasting (-15%, 0.8%) were pressured by varying degrees by the increasing level of investment required to compete in the new streaming world. US cable operator Comcast Corp. (-10%, 2.0%) declined after disclosing broadband subscriber growth would decelerate more than expected. Finally, Swedish Match (-9%, 6.4%) suffered from headlines early in the quarter suggesting its smokeless tobacco products would be subject to a new nicotine tax in the U.S., a proposal subsequently deleted.
COMPARATIVE RESULTS
Average Annual Returns through December 31, 2021 (a)
Total returns and average annual returns reflect changes in share price, reinvestment of distributions, and are net of expenses.
Performance returns for periods of less than one year are not annualized.
| Gabelli Value 25 Fund Inc. | QTR | 1 Year | 5 Year | 10 Year | 15 Year | Since Inception | |
| (09/29/89) | |||||||
| Class I (GVCIX) (b) | 1.64% | 15.33% | 8.64% | 9.38% | 6.62% | 10.00% | |
| S&P 500 Index (c) | 11.03 | 28.71 | 18.47 | 16.55 | 10.66 | 10.74 |
LET’S TALK STOCKS
Genuine Parts Co. (3.2% of net assets as of December 31, 2021) (GPC, Financial) (GPC – $140.20 – NYSE) is an Atlanta, Georgia-based distributor of automotive and industrial replacement parts. GPC’s core aftermarket business has proven to be resilient during difficult times as proven by strong positive comps during the Great Recession, consumers have already returned to the road as they fear mass transportation, and we expect to see +20% growth over the next few years in the aftermarket “sweet spot” or those vehicles aged 6-11 years old. GPC has a strong competitive position in both business segments and should be able to drive share gains during this difficult time while management has shown consistent dedication to shareholder value via share repurchases and dividend increases as business returns to normal levels. Finally, GPC has ably passed along prices to customers during inflationary periods, increasing gross profit dollars as prices rise.
Madison Square Garden Sports Co. (3.0%) (MSGS, Financial) (MSGS – $ 3173.73 – NYSE), owner of the New York Knicks basketball team andthe New York Rangers hockey team, is one the few ways for the public to access the positive dynamics of sports franchises. The company’s predecessor was originally spun-off from Cablevision in 2010 and subsequently separated is regional sports networks as MSG Networks and then its venue and entertainment businesses via Madison Square Garden Entertainment. Although the company was negatively impacted by a shortened season and attendance limitations due to COVID, the value of the teams has been growing along with the global popularity of basketball. The Knicks on-court has also improved with a core of young players and significant draft capital that should engender additional fan engagement and create incremental pricing power in future years.
Sony Corp. (5.5%) (SONY, Financial) (SONY – $126.40 – NYSE) is a conglomerate based in Tokyo, Japan focusing on direct-to-consumerentertainment products. Sony is the #1 integrated global gaming company with its Sony Playstation 5 gaming platform. Sony Music Recording commands #2 and Music Publishing #1 global share and is a hidden asset as music business is capitalizing the growth of streaming. Sony also operates the Sony/Columbia film studio, which is well positioned in the OTT streaming wars as a major supplier of high quality library shows like Seinfeld and Spiderman. Sony is an image sensor leader with over 50% global revenue share. We expect strong 5G iPhone upgrade cycle and larger and advanced camera sensors will benefit Sony as a sole supplier of iPhone’s image sensors. Sony is also aiming at championing its image sensor products for Advanced Driver Assistance Systems in automotive. Sony’s Electronics business remains a globally diversified and defensive cash generator.
ViacomCBS (5.5%) (PARA, Financial) (VIA – $33.37 – NASDAQ) is the product of the December 2019 recombination of Viacom and CBS, two companies controlled by the family of the late Sumner Redstone. ViacomCBS is a globally-scaled content company with networks including CBS, Showtime, Nickelodeon, MTV, Comedy Central, VH1, BET, thirty television stations and the Paramount movie studio. The companies separated in 2005, but changes in the media landscape have put a premium on global scale. Together ViacomCBS should be able to better navigate shifts in consumer behavior and monetization while generating significant cost savings and enhancing revenue growth with the nascent Paramount+ direct-to-consumer platform as a centerpiece.
a Other classes of shares are available, with different characteristics. For additional information please contact your financial advisor or call 800-GABELLI.
b Returns would have been lower had Gabelli Funds, LLC, (the “Adviser”) not reimbursed certain expenses of the Fund. The Class A Share NAVs are used to calculate performance for the period prior to the issuance of Class I Shares on January 11, 2008. The actual performance of the Class I Shares would have been higher due to lower expenses related to this class of shares. The Fund imposes a 2% redemption fee on shares sold or exchanged within seven days of purchase.
c The S&P 500 Index is a market capitalization weighted index of 500 large capitalization stocks commonly used to represent the U.S. equity market Dividends are considered reinvested. You cannot invest directly in an index.
In the current prospectuses dated April 30, 2021, the gross expense ratio for Class I Shares is 1.19%, and the net expense ratio after contractual reimbursements by the Adviser is 1.00%. The contractual reimbursement for Class I Shares is in effect through April 30, 2022. Class I Shares do not have a sales charge.
Returns represent past performance and do not guarantee future results. Investment returns and the principal value of an investment will fluctuate. When shares are redeemed, they may be worth more or less than their original cost. Current performance may be lower or higher than the performance data presented. Visit www.gabelli.com for performance information as of the most recent month end.
