CET Central Securities Corp

 

CENTRAL SECURITIES CORPORATION

STATEMENT OF INVESTMENTS

September 30, 2024

(unaudited)

 

Shares						Value
COMMON STOCKS 91.2%
				Banks 2.4%
	180,000			JPMorgan Chase & Co.		$	37,954,800
				Communications Services 8.3%
	450,000			Alphabet Inc. Class A			74,632,500
	100,000			Meta Platforms, Inc. Class A			57,244,000
							131,876,500
				Diversified Financial 10.3%
	170,000			American Express Company			46,104,000
	300,000			Capital One Financial Corporation			44,919,000
	800,000			The Charles Schwab Corporation			51,848,000
	75,000			Visa Inc. Class A			20,621,250
							163,492,250
				Diversified Industrial 3.3%
	120,000			AerCap Holdings N.V.			11,366,400
	85,000			Ashtead Group plc ADR			26,255,650
	200,000			Brady Corporation Class A			15,326,000
							52,948,050
				Energy 2.3%
	275,000			Hess Corporation			37,345,000
				Health Care 3.1%
	90,000			Johnson & Johnson			14,585,400
	185,000			Medtronic plc			16,655,550
	160,000			Merck & Co., Inc.			18,169,600
							49,410,550
				Insurance Brokers 4.0%
	100,000			Aon plc Class A			34,599,000
	105,000			Arthur J. Gallagher & Co.			29,543,850
							64,142,850
				Insurance Underwriters 31.6%
	28,424			The Plymouth Rock Company Class A (b)(c)			397,936,000
	420,000			Progressive Corporation			106,579,200
							504,515,200
				Real Estate 2.3%
	1,150,000			Rayonier Inc.			37,007,000

 

 

Shares						Value
				Retailing 4.3%
	225,000			Amazon.com, Inc. (a)		$	41,924,250
	13,000			Mercadolibre, Inc. (a)			26,675,480
							68,599,730
				Semiconductor 6.4%
	400,000			Analog Devices, Inc.			92,068,000
	400,000			Intel Corporation			9,384,000
							101,452,000
				Software and Services 4.1%
	80,000			Microsoft Corporation			34,424,000
	55,000			Roper Technologies, Inc.			30,604,200
							65,028,200
				Technology Hardware and Equipment 8.8%
	200,000			Coherent Corp. (a)			17,782,000
	200,000			Keysight Technologies, Inc. (a)			31,786,000
	145,000			Motorola Solutions, Inc.			65,196,350
	60,000			Teledyne Technologies Incorporated (a)			26,259,600
							141,023,950
				Total Common Stocks (cost $386,451,182)			1,454,796,080
SHORT-TERM INVESTMENTS 8.8%
				Money Market Fund 3.1%
	49,746,940			Goldman Sachs Financial Square Treasury Investments Fund			49,746,940
Principal				U.S. Treasury Bills 5.7%
$	90,000,000			U.S. Treasury Bills 4.67% - 4.89% due 10/8/24 - 10/22/24 (d)			89,828,714
				Total Short-Term Investments (cost $139.575,654)			139,575,654
				Total Investments (cost $526,026,836) (100.0%)			1,594,371,734
				Cash, receivables and other assets less liabilities (0.0%)			82,962
				Net Assets (100%)		$	1,594,454,696

 

(a) Non-dividend paying.

(b) Affiliate as defined in the Investment Company Act of 1940 and restricted.  See Note 3 and Note 4.

(c) Valued based on Level 3 inputs.  See Note 2.

(d) Valued based on Level 2 inputs.  See Note 2.

 

See accompanying notes to statement of investments.

 

 

CENTRAL SECURITIES CORPORATION

(the “Corporation”)

NOTES TO STATEMENT OF INVESTMENTS

(unaudited)

 

1. Security Valuation – Marketable common stocks are valued at the last or closing sale price or, if unavailable, at the closing bid price at the valuation date. Investments in money market funds are valued at net asset value per share. Other short-term investments are valued at amortized cost, which approximates fair value. Securities for which no ready market exists are valued at estimated fair value pursuant to procedures adopted by the Board of Directors. The determination of fair value involves subjective judgments. As a result, using fair value to price a security may result in a price materially different from the price used by other investors or the price that may be realized upon the actual sale of the security.

 

As of September 30, 2024, the tax cost of investments was $526,026,836. Net unrealized appreciation was $1,068,344,898 consisting of gross unrealized appreciation and gross unrealized depreciation of $1,068,344,898 and $0, respectively. 

 

2. Fair Value Measurements – The Corporation’s investments are categorized below in three broad hierarchical levels based on market price observability as follows: 

●

Level 1 – Quoted prices in active markets for identical investments;

●

Level 2 – Other significant observable inputs obtained from independent sources, for example, quoted prices in active markets for similar investments;

●

Level 3 – Significant unobservable inputs including the Corporation’s own assumptions based upon the best information available. The Corporation’s only Level 3 investment is The Plymouth Rock Company Class A Common Stock (“Plymouth Rock”).

 

The designated Level for a security is not necessarily an indication of the risk associated with investing in that security.

 

The Corporation’s investments as of September 30, 2024 are classified as follows:

 

		Level 1				Level 2				Level 3				Total
Common stocks		$	1,056,860,080			$	—			$	397,936,000			$	1,454,796,080
Short-term investments			49,746,940				89,828,714				—				139,575,654
Total investments		$	1,106,607,020			$	89,828,714			$	397,936,000			$	1,594,371,734

 

The following is a reconciliation of the change in the value of Level 3 investments:

 

Balance as of December 31, 2023		$	304,136,800
Change in net unrealized appreciation of investments in affiliated companies included in increase in net assets from operations			93,799,200
Balance as of September 30, 2024		$	397,936,000

 

Unrealized appreciation of Level 3 investments still held as of September 30, 2024 increased during the nine months ended September 30, 2024 by $93,799,200, which is included in the above table.

 

Management assists the Board of Directors in the determination of fair value of Plymouth Rock. In valuing the Plymouth Rock Level 3 investment as of September 30, 2024, management considered Plymouth Rock’s financial condition and results of operations, the insurance industry outlook, and any transactions in Plymouth Rock’s shares. Management used significant unobservable inputs to develop a range of values for the investment. It used a comparable company approach that utilized the following valuation multiples from selected publicly traded companies: price-to-book value (range: 1.0–3.0; average: 1.9); price-to-historical earnings (range: 18.0–52.3; average: 32.5); and price-to-forward earnings estimates (range: 12.1–29.5; average: 19.6). Management also used Plymouth Rock’s book value and a discounted cash flow model based on a forecasted return on equity of approximately 13% and a cost of capital of approximately 12%. The average of these values was then discounted for lack of marketability and control of the Plymouth Rock shares. Management considered a discount range of 25% to 35%, a range management believes market participants would apply. An independent valuation of Plymouth Rock’s shares obtained by Plymouth Rock was also considered. Management presented and discussed the above information with the Corporation’s directors, who approved the value for the investment.

 

 

Increases (decreases) in the price-to-book value multiple, price-to-historical earnings multiple, price-to-forward earnings estimate multiple, return on equity rate and book value in isolation would have resulted in a higher (lower) range of fair values. Increases (decreases) in the discount for lack of marketability and control or cost of capital in isolation would have resulted in a lower (higher) range of fair values.

 

3. Restricted Securities – The Corporation may from time to time invest in securities the resale of which is restricted. On September 30, 2024, the Corporation’s only restricted security consisted of 28,424 shares of Plymouth Rock that were acquired on December 15, 1982 at a cost of $710,600. This security had a value of $397,936,000 at September 30, 2024, which was equal to 25.0% of the Corporation’s net assets. The Corporation does not have the right to demand registration of this security.

 

4. Affiliated Companies – Plymouth Rock is an affiliated company as defined in the Investment Company Act of 1940 due to the Corporation’s ownership of 5% or more of the company’s outstanding voting securities. During the nine months ended September 30, 2024, unrealized appreciation from the Corporation’s investment in Plymouth Rock increased by $93,799,200 and the Corporation received dividends of $8,060,762 from Plymouth Rock. The Chairman of the Corporation is a director of Plymouth Rock. The Chief Executive Officer of the Corporation is a director of certain subsidiaries of Plymouth Rock.

 

 

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