Mario Gabelli's Gabelli Value 25 Fund 1st-Quarter Commentary: Looking Back

INVESTMENT SCORECARD

Reflecting the resilience of the consumer, credit card issuer American Express (AXP, Financial) (6.6% of net assets as of March 31, 2024, +22%) was the leading contributor to First Quarter returns. Waste disposal firms Republic Services (RSG, Financial) (5.4%, +16%) and Waste Connections (WCN, Financial) (2.3%, +15%) performed well as sustained volumes with inflation-indexed pricing drove growth. Sphere Entertainment (SPHR, Financial) (2.2%, +45%) rose after posting better than expected results for the first full quarter of operations at unique Las Vegas entertainment venue. Finally, Meta (META, Financial) (2.0%, +37%) continued its march higher as it takes advertising share while streamlining costs. Newmont Corp. (NEM, Financial) (4.4%, -13%) was the largest detractor from Q1 performance as the market continues to digest its recently closed acquisition of Australian miner Newcrest Mining. Sony Corp. (SONY, Financial) (6.7%, -9%) cut its forecast for PlayStation 5 unit sales during the quarter. Warner Bros. Discovery (WBD, Financial) (1.0%, -23%) hit several speed bumps including a lack of new product owing to last year's actor and writer strikes and cyclical softness in advertising on its path to a direct-to-consumer future. Finally, Liberty Broadband (LBRDA, Financial) (0.5%, -29%) declined along with its primary asset, a 26% stake in broadband provider Charter Communications (CHTR, Financial), as Charter contends with incremental competition from fixed wireless and heavy investment in its infrastructure.

COMPARATIVE RESULTS

Average Annual Returns through March 31, 2024 (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.

LET'S TALK STOCKS

American Express Co. (AXP, Financial) (6.6% of net assets as of March 31, 2024) (AXP – $187.34 – NYSE) Madison Square Garden Sports Co. (4.5% of net assets as of March 31, 2024) (MSGS – $184.52 – NYSE), owner of the New York Knicks basketball team and the 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 spun-off from Cablevision in 2010 and subsequently separated its venue and entertainment businesses. Team values have appreciated significantly as they represent excellent stores of value in an inflationary environment; basketball in particular has significant global growth potential. 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.

Newmont Corp. (NEM, Financial) (4.3%) (NEM – $4.3% – NYSE) is the largest gold mining company in the world by volume, expected to produce approximately 7 million ounces in 2024. Newmont recently completed the acquisition of Newcrest Mining, a large Australia-based gold mining company. In acquiring Newcrest, Newmont was able to add low cost, long life mines to its portfolio of assets. It is now in the process of divesting of higher cost and shorter life mines, while optimizing the remaining portfolio. Once the portfolio optimization is complete, in addition to being the largest, Newmont will be amongst the lowest cost gold producers in the world with a demonstrable mine life approaching 20 years.

Paramount Global (PARA, Financial) (5.1%) (PARAA – $21.83 – NASDAQ) is the product of the December 2019 recombination of Viacom and CBS, two companies controlled by the family of the late Sumner Redstone. Paramount (formerly 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 company has used its increased scale to better navigate the shifts in consumer behavior and monetization primarily through the successful launch of its Paramount+ direct-to-consumer platform. Press speculation suggests that Paramount's controlling shareholder, National Amusements, may sell itself or the entire company.

Republic Services Inc. (RSG, Financial) (5.4%) (RSG – $191.44– NYSE), based in Phoenix, Arizona, is the second largest solid waste company in North America. Republic provides nonhazardous solid waste collection services for commercial, industrial, municipal, and residential customers in forty-one states and Puerto Rico. Republic serves more than 2,800 municipalities and operates 207 landfills, 246 transfer stations, 364 collection operations, and 74 recycling facilities. Republic has benefited from synergies driven by route density, beneficial use of acquired assets, and reduction in redundant corporate overhead. We expect continued solid waste and environmental solutions growth acquisitions, earnings improvement, and incremental route density and internalization growth in already established markets to generate real value in the near to medium term, highlighting the company's potential.

Sony Group Inc. (SONY, Financial) (6.6%) (SONY – $85.74 – NYSE) is a global conglomerate based in Tokyo, Japan focusing on direct-to-consumer entertainment products. Sony is the #1 integrated global gaming company with its Sony PlayStation 5 gaming platform and video game development studios. Sony Music Recording commands #2 and Music Publishing #1 global share. Sony Music is capitalizing the growth of streaming and higher music royalty fees. 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. Sony is an image sensor leader and its expanding its growth opportunity from the high-end Apple iPhones to automotive, industrial automation, and security. Sony is experiencing softness in video game market. The company reduced its shipment forecast for PlayStation 5 and will see a short-term challenge of delay in the launch of new major existing franchise titles. Sony's Electronics business remains a globally diversified and defensive cash generator.

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.