General American Investors Files Certified Shareholder Report for Year Ended December 31, 2023

Rhea-AI Summary

General American Investors Company, Inc. (GAM) filed its Certified Shareholder Report with the SEC, revealing financial data for 2023. The report shows an increase in Net Assets Applicable to Common Stock, Net Investment Income, and Dividends to Common Shareholders compared to 2022. The Company also repurchased shares and disclosed its top stock holdings.

Positive

• Increase in Net Assets Applicable to Common Stock from $1,041,159,645 in 2022 to $1,233,031,938 in 2023.
• Net Investment Income rose from $5,508,597 in 2022 to $10,577,329 in 2023.
• Dividends to Common Shareholders increased from $36,099,231 in 2022 to $61,945,377 in 2023.
• Repurchased 776,220 shares of outstanding common stock in 2023.
• Top stock holdings include Republic Services, Microsoft Corporation, Alphabet Inc., Apple Inc., and Berkshire Hathaway, Inc.

Negative

• None.

Insights

Financial Analyst

The recent filing by General American Investors Company, Inc. of its Certified Shareholder Report (Form N-CSR) for the year ended December 31, 2023, presents a substantial increase in net assets applicable to common stock, rising from approximately $1.04 billion in 2022 to $1.23 billion in 2023. This represents a noteworthy growth in shareholder equity, which is a critical indicator of the company's financial health and can affect investor confidence. The report also disclosed a significant improvement in net investment income, which doubled from $5.5 million in 2022 to $10.6 million in 2023, reflecting the company's ability to generate earnings from its investment portfolio.

Moreover, the shift from a net loss on investments in 2022 to a net gain in 2023 is indicative of a successful investment strategy, especially during a period that has been volatile for the markets. The net gain on investments of approximately $262.8 million, compared to a net loss of $182.8 million the previous year, could suggest a strong recovery and effective portfolio management. Additionally, the company's strategy to repurchase shares when trading at a significant discount could potentially lead to accretion in shareholder value, as it may indicate management's confidence in the intrinsic value of the stock.

Market Research Analyst

The composition of General American Investors Company's portfolio, particularly the inclusion of large-cap stocks like Republic Services, Microsoft Corporation, Alphabet Inc., Apple Inc. and Berkshire Hathaway, Inc., is a strategic choice that may provide stability and growth. These companies are known for their robust market positions and have historically shown resilience in various market conditions. The emphasis on such blue-chip stocks could be appealing to conservative investors seeking long-term capital appreciation with potentially lower volatility.

Furthermore, the company's long history since 1927 and its consistent public trading since its inception, contribute to its reputation and may instill a sense of reliability among investors. The authorization to repurchase preferred shares when trading below their liquidation value also suggests a proactive approach to capital management, which could be reassuring to preferred shareholders concerned about the preservation of capital.

Economist

General American Investors Company's performance, as indicated by the increase in net assets and net investment income, must be contextualized within the broader economic landscape of 2023. The reported financials suggest that the company navigated the economic conditions effectively, which may include fluctuating interest rates, inflationary pressures, or other macroeconomic factors. The ability to achieve capital appreciation in such an environment could be indicative of a robust investment strategy and a well-diversified portfolio.

Additionally, the company's policy of repurchasing common shares at a discount greater than 8% could be seen as a strategic use of capital, particularly in a market that might be undervaluing the company's shares. This move could not only signal management's confidence to the market but also serve as a mechanism to support the stock price during periods of market undervaluation.

NEW YORK--(BUSINESS WIRE)-- General American Investors Company, Inc., a closed-end investment company listed on the New York Stock Exchange (GAM), filed with the U.S. Securities and Exchange Commission (SEC) its Certified Shareholder Report (Form N-CSR) for the year ended December 31, 2023. The Form N-CSR, which contains the Company’s 2023 Annual Report, is available at the SEC’s website: www.sec.gov and the Company’s website: www.generalamericaninvestors.com.

The 2023 Annual Report and the Proxy Statement, pertaining to the Company’s Annual Meeting of Stockholders to be held on April 24, 2024, are also available on the website.

The Annual Report indicates that as of and for the year ended:

	2023		2022
Net Assets Applicable to Common Stock	$1,233,031,938		$1,041,159,645
Per Common Share	$51.96*		$43.42**
Net Investment Income	$10,577,329		$5,508,597
Per Common Share	$0.44		$0.22
Net Gain (Loss) on Investments	$262,826,469		($182,783,273)
Per Common Share	$11.18		($7.38)
Common Shares Outstanding	23,732,324		23,979,022
Dividends and Distributions to Common Shareholders	$61,945,377		$36,099,231
Per Common Share	$2.65		$1.50
Dividends and Distributions to Preferred Shareholders	$11,310,806		$11,311,972
Per Common Share	$0.48		$0.47

*	After dividends and distributions of $2.65 per share paid in December 2023.
**	After dividends and distributions of $1.00 per share paid in December 2022 and $0.50 per share paid in February 2022.

The Company also reported that it purchased 776,220 shares of its outstanding common stock in the open market during 2023. The Board of Directors has authorized repurchasing common shares when they are trading at a discount in excess of 8%. The Company is also authorized to repurchase up to a remaining 1,601,553 shares of its 5.95% Cumulative Preferred Stock, Series B (symbol GAM Pr B on NYSE) when they are trading at less than $25 per share. The aggregate liquidation value of the preferred stock is $190.0 million.

The five largest stock holdings in the Company’s portfolio at December 31, 2023 included: Republic Services, Microsoft Corporation, Alphabet Inc., Apple Inc., and Berkshire Hathaway, Inc. General American Investors was founded in 1927, has been publicly traded since its inception and has been listed on the NYSE since 1930. The objective of the Company is long-term capital appreciation through investment in companies with above average growth potential.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240216612325/en/

Eugene S. Stark

Vice-President, Administration

(212) 916-8447

Source: General American Investors Company, Inc.

FAQ

What is the Net Assets Applicable to Common Stock for General American Investors in 2023?

General American Investors' Net Assets Applicable to Common Stock for 2023 is $1,233,031,938.

How much did General American Investors' Net Investment Income increase by from 2022 to 2023?

General American Investors' Net Investment Income increased from $5,508,597 in 2022 to $10,577,329 in 2023.

What was the total Dividends and Distributions to Common Shareholders in 2023 for General American Investors?

General American Investors paid $61,945,377 in Dividends and Distributions to Common Shareholders in 2023.

How many shares of its outstanding common stock did General American Investors repurchase in 2023?

General American Investors repurchased 776,220 shares of its outstanding common stock in 2023.

What are the top five stock holdings in General American Investors' portfolio as of December 31, 2023?

The top five stock holdings in General American Investors' portfolio as of December 31, 2023, include Republic Services, Microsoft Corporation, Alphabet Inc., Apple Inc., and Berkshire Hathaway, Inc.