Author Topic: Central Securities Corporation  (Read 3648 times)

OracleofCarolina

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Central Securities Corporation
« on: February 07, 2014, 05:47:02 PM »
http://www.centralsecurities.com/AnnualReport2013.pdf

I usually don't pay much attention to closed end funds, but this one is different.

It has been around since 1929, it has beat the S&P 500 over the past 30 years with steady performance and minimal turnover in holdings.

It's largest holding is Plymouth Rock, a non-public insurance company. With a 900k investment in 1982, the position is now valued at $110 million, about a 17% annual return not even counting dividends...not too shabby


DanielGMask

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Re: Central Securities Corporation
« Reply #1 on: January 02, 2019, 10:02:35 PM »
http://www.centralsecurities.com/AnnualReport2013.pdf

I usually don't pay much attention to closed end funds, but this one is different.

It has been around since 1929, it has beat the S&P 500 over the past 30 years with steady performance and minimal turnover in holdings.

It's largest holding is Plymouth Rock, a non-public insurance company. With a 900k investment in 1982, the position is now valued at $110 million, about a 17% annual return not even counting dividends...not too shabby

Are you a shareholder? Are you familiar with the company?
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mjm

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Re: Central Securities Corporation
« Reply #2 on: January 03, 2019, 05:18:17 AM »
own fair amount in retirement plans.  like it.  plymouth rock stake may eventually be sold. plymouth kind of acts as buffer to NAV % as not publicly listed, but it valued pretty conservatively. wilmot and his trusts own I think around 80%.

bookie71

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Re: Central Securities Corporation
« Reply #3 on: January 03, 2019, 10:14:43 AM »
It has a double discount, one for market value and one for the valuation of Plymouth Rock
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Williams406

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Re: Central Securities Corporation
« Reply #4 on: January 04, 2019, 08:45:58 AM »
mjm: has Central Securities publicly-stated anything suggesting a possible sale of Plymouth stake? Or were you just saying it's a hypothetical?

bookie71: Looking at 12/31/17 data for both Plymouth I see the following:
per share shareholder equity = $4,210 (page 14 of 2017 Plymouth AR)
per share independent appraisal = $7,990 (1.9x book)
with 20% discount = $6,390

Looks like Central Securities valued their Plymouth stake on 12/31/17 @ $5,100/share ($144 million/28,424 shares), a 35-40% discount to undiscounted Plymouth independent appraisal. In other words, Central Securities values it's Plymouth stake at roughly a 1.2x premium to Plymouth reported book at 12/31/17.
That doesn't seem a stretch given book-value growth at Plymouth of late.

Interesting idea...glad DanielGMask resurrected it. Has anyone come across language from Central Securities breaking out the impact on long-term returns from the non-Plymouth portfolio?

Spekulatius

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Re: Central Securities Corporation
« Reply #5 on: January 04, 2019, 08:51:27 AM »
The deferred taxes on LT gains need to be taken into account, since the cost base of their long term holdings is so low.
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Williams406

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Re: Central Securities Corporation
« Reply #6 on: January 04, 2019, 09:04:08 AM »
But in a scenario where a shareholder holds the position in a tax-deferred account, any realized capital gain distributed to shareholders from, say, the sale of the Plymouth stake would not ding the shareholder tax-wise, correct? My understanding is that as a closed-end investment corporation, Central Securities does not have that tax liability assuming the realized gain is distributed.

Jurgis

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Re: Central Securities Corporation
« Reply #7 on: January 04, 2019, 09:20:12 AM »
Maybe add ticker and move to stock forum?
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mjm

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Re: Central Securities Corporation
« Reply #8 on: January 04, 2019, 10:11:30 AM »
williams406, believe CET sold 20% or so back to PROC few years ago and believe they/CET or PROC stated would like to sell back more or all ( believe wilmot on PROC board).

believe PROC would like to buy back , but they also have their eye on SAFT( see their portfolio https://www.sec.gov/Archives/edgar/data/1496228/000156761918005956/xslForm13F_X01/form13fInfoTable.xml ) which is big in same state(MASS) that PROC started in.

as Spekulatius stated they have a lot of deferred taxes therefore that is why i like it in my retirement plans. 

Also how does on reply to another with the pretty little bold print. know  I am looking a little obtuse here.

Williams406

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Re: Central Securities Corporation
« Reply #9 on: January 04, 2019, 10:44:18 AM »
Thanks, mjm. I'll read through a few more CET annuals and see if I can track down the partial Plymouth sale terms.