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Bill Gates and Company Insider Agree On Selling GAMCO Investors Inc. Shares
Posted by: guruek (IP Logged)
Date: June 4, 2009 12:40AM
(GuruFocus, June 3, 2009)Bill Gates’s personal portfolio managed by Michael Larson as Cascade Investment LLC has reduced its ownership in investment management company GAMCO Investors Inc. (GBL). On June 1, 2009, Bill Gates sold 6,400 shares (or 7.6%) of its holdings in GBL at the price of $54.31 per share. After the sale, Bill Gates owns 84,445 shares of GBL.
Bill Gates started to own and maintain a position of GBL since 1Q08, when the stock was at $50 per share. The stock fell to a low of $26 in early March 2009 and has since quickly doubled. Bill Gates’s recent sale represents a break-even trade.
GAMCO Investors Inc. manages assets in private advisory accounts (GAMCO Asset Management Inc.), mutual funds closed-end funds (Gabelli Funds LLC), and partnerships and offshore funds (Investment Partnerships). GAMCO Investors Inc. has a market cap of $1.47 billion; its shares were traded at around $53 with a P/E ratio of 66.2 and P/S ratio of 6. The dividend yield of GAMCO Investors Inc. stocks is 0.2%. GAMCO Investors Inc. had an annual average earning growth of 5.5% over the past 5 years.
On May 6, 2009, the company announced first quarter 2009 earnings of $0.30 per fully diluted share versus $0.37 per fully diluted share in the first quarter 2008. Net income was $8.2 million in the first quarter 2009 compared to $10.5 million in the first quarter 2008. In the first quarter 2009, investment gains (non-operating) were $0.7 million versus investment losses of $5.6 million in the prior year's quarter. Operating income before management fee was $12.9 million in the first quarter 2009, 48.8% lower than the $25.2 million in the first quarter 2008.
Besides Bill Gates, John Keeley, Michael Price, and Bruce Sherman also own GBL shares. In 1Q09, Bruce Sherman was selling his positions.
Insiders trading activities are mixed. While President & COO Douglas R Jamieson bought 4,000 shares of GBL stock on back on 03/06/2009 at the average price of $26.75, other insiders, including Director, 10% Owner Mario J Gabelli sold 5,300 shares of GBL stock on 06/02/2009 at the average price of $54.13. He also sold 9,900 shares on 06/01/2009, the same day when Bill Gates sold his shares.
It seems Bill Gates and Mario Gabelli agree on one thing: the GBL stock overextend itself and it is ripe to be sold
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