Investor Mario Gabelli may want to thank billionaire tycoons Rupert Murdoch and Sam Zell for a good year in 2007 and a record high in the stock price of his GAMCO Investors Inc.
Gabelli, known for sending personal messages by mail, might even want to send them on gold-embossed stationary.
Murdoch's takeover of Dow Jones & Co and Zell's buyout of Tribune Co helped spur strong performances last year of portfolios managed at GAMCO, Gabelli said in a telephone interview on Friday. The other big driver was Gabelli's bet on gold.
GAMCO's Gold Fund returned 24.7 percent last year, while the Asset Fund returned 11.8 percent and the Utilities Fund 8.6 percent, according to company data.
The benchmark Standard & Poor's 500 Index .SPX, including dividends, returned about 5.5 percent.
Some asset managers have struggled recently, but 2007 marked a big turnaround for GAMCO, and it has been reflected in a stock that has weathered the broader weakness in financials.
On Friday, for example, GAMCO was one of just 20 stocks on the New York Stock Exchange to hit a 52-week high, whereas nearly 500 NYSE listings hit 12-month lows amid a broad sell-off on Wall Street.
Rival asset manager Legg Mason Inc is down about 26 percent and Franklin Resources Inc is off about 3.2 percent since the end of 2006. GAMCO almost doubled in price last year.
Citing securities regulations, Gabelli said he couldn't discuss the stock price of GAMCO, whose shares touched a record high of $73.36 on Friday before paring gains and heading into negative territory.
I can't answer why the Street does what it does, said Gabelli.
Gabelli said gold, utilities and telecoms had performed well for GAMCO, which oversaw $31.6 billion in assets as of September 30, the last period for reporting holdings.
A number of takeovers of companies held by GAMCO, including Alltel Corp and Hilton Hotels, also helped performance, he said.
And GAMCO has steered clear of financials, although it has recently been nibbling at Goldman Sachs Group Inc and Bear Stearns, Gabelli said. Financial stocks were down about 20 percent in 2007, making financials the worst-performing sector.
The surge in GAMCO shares marks a comeback from almost two years ago, when the company was battered because of lawsuits filed against Gabelli, one of the best-known investors on Wall Street who founded the company three decades ago.
GAMCO's stock price slumped to under $33 a share in June 2006. Analysts questioned whether Gabelli, who is chairman, chief executive and chief investment officer at GAMCO, was stretched too thin. They also questioned GAMCO's performance.
GAMCO's sell-off was a good buying opportunity, said Philip Tasho, chief investment officer at TAMRO Capital Partners LLC, now one of GAMCO's largest institutional shareholders.
After examining why investors had sold the company's stock, Tasho said he liked what GAMCO was all about.
It's really hard to find people in this profession that are long tenured, that have a very good record, and that was Mr. Mario Gabelli, Tasho said.
He had a very good understanding of certain sectors of the market that had been out of vogue -- media and telecoms, obviously, he said. That's part of the reason why he did very well.
GAMCO also paid a special $1 per share cash dividend in July, which Tasho said was nice.
TAMRO normally prefers to talk to management before making a purchase, but Tasho said the firm's calls to GAMCO went unanswered. Gabelli's stock-picking performance clinched Tasho's decision to buy, starting in August 2006, he said.
Gabelli may be very savvy with the media, but he's very difficult to contact. He won't return our calls, Tasho said.
(Editing by Leslie Adler)