0001387131-20-009812.txt : 20201112 0001387131-20-009812.hdr.sgml : 20201112 20201112134414 ACCESSION NUMBER: 0001387131-20-009812 CONFORMED SUBMISSION TYPE: NPORT-P PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20200930 FILED AS OF DATE: 20201112 PERIOD START: 20201231 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTRAL SECURITIES CORP CENTRAL INDEX KEY: 0000018748 IRS NUMBER: 131875970 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: NPORT-P SEC ACT: 1940 Act SEC FILE NUMBER: 811-00179 FILM NUMBER: 201305538 BUSINESS ADDRESS: STREET 1: 630 FIFTH AVENUE STREET 2: SUITE 820 CITY: NEW YORK STATE: NY ZIP: 10111 BUSINESS PHONE: 212-698-2020 MAIL ADDRESS: STREET 1: 630 FIFTH AVENUE STREET 2: SUITE 820 CITY: NEW YORK STATE: NY ZIP: 10111 FORMER COMPANY: FORMER CONFORMED NAME: TRANS CENTRAL SECURITIES CORP DATE OF NAME CHANGE: 19700722 FORMER COMPANY: FORMER CONFORMED NAME: BUERGER LADET & RADINSKY INC DATE OF NAME CHANGE: 19671026 NPORT-P 1 primary_doc.xml NPORT-P false 0000018748 XXXXXXXX CENTRAL SECURITIES CORPORATION 811-00179 0000018748 549300D87MQ4TEVRK235 630 Fifth Avenue Suite 820 NY 10111 212-698-2020 N/A N/A 2020-12-31 2020-09-30 N 924625374 2651655 921973718 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N Alphabet Inc. 5493006MHB84DD0ZWV18 Common Stock - Class A 02079K305 25000 NS USD 36640000 3.97 Long EC CORP US N 1 N N N Amazon.com, Inc. ZXTILKJKG63JELOEG630 Common Stock 023135106 11000 NS USD 34636030 3.76 Long EC CORP US N 1 N N N American Express Company R4PP93JZOLY261QX3811 Common Stock 025816109 300000 NS USD 30075000 3.26 Long EC CORP US N 1 N N N Analog Devices, Inc. GYVOE5EZ4GDAVTU4CQ61 Common Stock 032654105 445000 NS USD 51949300 5.63 Long EC CORP US N 1 N N N Aon plc VVT2B79I2Z4U3R6BY589 Common Stock - Class A G0403H108 130000 NS USD 26819000 2.91 Long EC CORP IE N 1 N N N Berkshire Hathaway Inc. 5493000C01ZX7D35SD85 Common Stock - Class A 084670108 35 NS USD 11200035 1.21 Long EC CORP US N 1 N N N Brady Corporation 549300G2LEQOFQC8GY34 Common Stock - Class A 104674106 240000 NS USD 9604800 1.04 Long EC CORP US N 1 N N N Capital One Financial Corporation ZUE8T73ROZOF6FLBAR73 Common Stock 14040H105 340000 NS USD 24432400 2.65 Long EC CORP US N 1 N N N Cogent Communications Holdings, Inc. N/A Common Stock 19239V302 145000 NS USD 8707250 0.94 Long EC CORP US N 1 N N N Coherent, Inc. 549300RYOCKUMWACR010 Common Stock 192479103 385000 NS USD 42708050 4.63 Long EC CORP US N 1 N N N Cree, Inc. 549300OGU88P3AW3TO93 Common Stock 225447101 166615 NS USD 10620040 1.15 Long EC CORP US N 1 N N N Heritage-Crystal Clean, Inc. N/A Common Stock 42726M106 700000 NS USD 9345000 1.01 Long EC CORP US N 1 N N N Hess Corporation UASVRYNXNK17ULIGK870 Common Stock 42809H107 700000 NS USD 28651000 3.11 Long EC CORP US N 1 N N N Intel Corporation KNX4USFCNGPY45LOCE31 Common Stock 458140100 500000 NS USD 25890000 2.81 Long EC CORP US N 1 N N N Johnson & Johnson 549300G0CFPGEF6X2043 Common Stock 478160104 90000 NS USD 13399200 1.45 Long EC CORP US N 1 N N N JPMorgan Chase & Co. 8I5DZWZKVSZI1NUHU748 Common Stock 46625H100 230000 NS USD 22142100 2.4 Long EC CORP US N 1 N N N Kennedy-Wilson Holdings, Inc. 549300MOI1T78144X610 Common Stock 489398107 570000 NS USD 8276400 0.9 Long EC CORP US N 1 N N N Keysight Technologies, Inc. 549300GLKVIO8YRCYN02 Common Stock 49338L103 225000 NS USD 22225500 2.41 Long EC CORP US N 1 N N N Medtronic plc 549300GX3ZBSQWUXY261 Common Stock G5960L103 195000 NS USD 20264400 2.2 Long EC CORP IE N 1 N N N Merck & Co., Inc. 4YV9Y5M8S0BRK1RP0397 Common Stock 58933Y105 200000 NS USD 16590000 1.8 Long EC CORP US N 1 N N N Micorsoft Corporation INR2EJN1ERAN0W5ZP974 Common Stock 594918104 90000 NS USD 18929700 2.05 Long EC CORP US N 1 N N N Motorola Solutions, Inc. 6S552MUG6KGJVEBSEC55 Common Stock 620076307 250000 NS USD 39202500 4.25 Long EC CORP US N 1 N N N Progressive Corporation 529900TACNVLY9DCR586 Common Stock 743315103 400000 NS USD 37868000 4.11 Long EC CORP US N 1 N N N Rayonier Inc. HGV8VDVNL0W6SF2U9C50 Common Stock 754907103 1100000 NS USD 29084000 3.15 Long EC CORP US N 1 N N N Ribbon Communications Inc. 549300L1E8Z8RL7CUL52 Common Stock 762544104 388746 NS USD 1504447 0.16 Long EC CORP US N 1 N N N Roche Holding AG 549300U41AUUVOAAOB37 ADR 771195104 300000 NS USD 12843000 1.39 Long EC CORP CH N 1 N N N Roper Technologies, Inc. 54930003T4SXCIWVXY35 Common Stock 776696106 54000 NS USD 21335940 2.31 Long EC CORP US N 1 N N N Star Group, L.P. N/A Common Units 85512C105 730000 OU Common Units USD 7117500 0.77 Long EC US N 1 N N N The Bank of New York Mellon Corporation WFLLPEPC7FZXENRZV188 Common Stock 064058100 360000 NS USD 12362400 1.34 Long EC CORP US N 1 N N N The Charles Schwab Corporation 549300VSGCJ7E698NM85 Common Stock 808513105 600000 NS USD 21738000 2.36 Long EC CORP US N 1 N N N Wynn Resorts Ltd. 254900CEKKWIHTEAB172 Common Stock 983134107 30000 NS USD 2154300 0.23 Long EC CORP US N 1 N N N The Plymouth Rock Company Incorporated 98450064D596453C6420 Common Stock - Class A N/A 28424 NS USD 206074000 22.35 Long EC CORP US Y 3 N N N Fidelity Colchester Street Trust 549300NPOIO5VXBKJA04 Treasury Only Portfolio Class I 233809300 8420261 NS USD 8420262 0.91 Long STIV RF US N 1 N N N U.S. Government N/A Treasury Bill 9137964G1 15000000 PA USD 14999826 1.63 Long DBT UST US N 2 2020-10-06 None 0.00085 N N N N N N U.S. Government N/A Treasury Bill 9137964G1 10000000 PA USD 9999914 1.08 Long DBT UST US N 2 2020-10-06 None 0.00062 N N N N N N U.S. Government N/A Treasury Bill 9127964K2 25000000 PA USD 24998605 2.71 Long DBT UST US N 2 2020-10-27 None 0.00078 N N N N N N 2020-11-12 CENTRAL SECURITIES CORPORATION /s/ Lawrence P. Vogel Lawrence P. Vogel Vice President and Treasurer XXXX NPORT-EX 2 cet-nportex_093020.htm STATEMENT OF INVESTMENTS

 

 

CENTRAL SECURITIES CORPORATION
STATEMENT OF INVESTMENTS
September 30, 2020
(unaudited)

 

Shares     Value 
COMMON STOCKS 93.8%
        
   Banks 2.4%    
230,000   JPMorgan Chase & Co.  $ 22,142,100 
          
   Communications Services 4.9%     
25,000   Alphabet Inc. Class A (a)   36,640,000 
145,000   Cogent Communications Holdings, Inc.   8,707,250 
        45,347,250 
          
   Consumer Services 0.2%     
30,000   Wynn Resorts Ltd. (a)   2,154,300 
          
   Diversified Financial 10.8%     
300,000   American Express Company   30,075,000 
360,000   The Bank of New York Mellon Corporation   12,362,400 
35   Berkshire Hathaway Inc. Class A (a)   11,200,035 
340,000   Capital One Financial Corporation   24,432,400 
600,000   The Charles Schwab Corporation   21,738,000 
        99,807,835 
          
   Diversified Industrial 4.4%     
240,000   Brady Corporation Class A   9,604,800 
700,000   Heritage-Crystal Clean, Inc. (a)   9,345,000 
54,000   Roper Technologies, Inc.   21,335,940 
        40,285,740 
          
   Energy 3.1%     
700,000   Hess Corporation   28,651,000 
          
   Health Care 6.8%     
90,000   Johnson & Johnson   13,399,200 
195,000   Medtronic plc   20,264,400 
200,000   Merck & Co., Inc.   16,590,000 
300,000   Roche Holding AG ADR   12,843,000 
        63,096,600 
          
   Insurance Brokers 2.9%     
130,000   Aon plc Class A   26,819,000 
          
   Insurance Underwriters 26.5%     
28,424   The Plymouth Rock Company Class A (b)(c)   206,074,000 
400,000   Progressive Corporation   37,868,000 
        243,942,000 

 

   
 

 

 

Shares       Value 
   Real Estate 4.0%     
570,000   Kennedy-Wilson Holdings, Inc.  $8,276,400 
1,100,000   Rayonier Inc.   29,084,000 
        37,360,400 
          
   Retailing 3.8%     
11,000   Amazon.com, Inc. (a)   34,636,030 
          
   Semiconductor 9.6%     
445,000   Analog Devices, Inc.   51,949,300 
166,615   Cree, Inc. (a)   10,620,040 
500,000   Intel Corporation   25,890,000 
        88,459,340 
          
   Software and Services 2.1%     
90,000   Microsoft Corporation   18,929,700 
          
   Technology Hardware and Equipment 11.5%     
385,000   Coherent, Inc. (a)   42,708,050 
225,000   Keysight Technologies, Inc. (a)   22,225,500 
250,000   Motorola Solutions, Inc.   39,202,500 
388,746   Ribbon Communications Inc. (a)   1,504,447 
        105,640,497 
          
   Utilities 0.8%     
730,000   Star Group, L.P.   7,117,500 
          
    Total Common Stocks (cost $366,354,011)   864,389,292 
          
SHORT-TERM INVESTMENTS 6.3%
          
   Money Market Fund 0.9%     
8,420,262   Fidelity Investments Money Market Fund      
    Treasury Only Portfolio - Class I   8,420,262 
          
Principal         
   U.S. Treasury Bills 5.4%     
$ 50,000,000   U.S. Treasury Bills 0.06% - 0.09%, due 10/6/20 - 10/27/20 (d)   49,998,345 
          
    Total Short-Term Investments (cost $58,418,607)   58,418,607 
          
    Total Investments (cost $424,772,618) (100.1%)   922,807,899 
          
    Cash, receivables and other assets less liabilities (0.1%)   (834,181)
          
    Net Assets (100%).  $921,973,718 

_________________________

 

 (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. 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, 2020, the tax cost of investments was $424,772,618. Net unrealized appreciation was $498,035,281 consisting of gross unrealized appreciation and gross unrealized depreciation of $504,680,352 and $6,645,071, 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, Inc. 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, 2020 are classified as follows:

                 
   Level 1   Level 2   Level 3   Total 
Common stocks  $658,315,292   $—   $206,074,000   $864,389,292 
Short-term investments   8,420,262    49,998,345    —    58,418,607 
Total investments  $666,735,554   $49,998,345   $206,074,000   $922,807,899 

 

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

 

Balance at December 31, 2019  $216,022,400 
Change in net unrealized appreciation of investments in affiliated companies included in net decrease in net assets resulting from operations   (9,948,400)
Balance at September 30, 2020  $206,074,000 

 

Unrealized appreciation of Level 3 investments held as of September 30, 2020 decreased by $9,948,400 during the nine months ended September 30, 2020, which is included in the above table.

 

In valuing the Plymouth Rock Level 3 investment as of September 30, 2020, 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: 0.7–1.3; average: 1.1); price-to-historical earnings (range: 11.1–43.2; average: 21.9); and price-to-forward earnings estimates (range: 7.1–39.6; average: 17.1). Management also used a discounted cash flow model based on a forecasted return on equity of approximately 10% and a cost of capital of approximately 10%. Plymouth Rock’s book value was also considered. Averages of these values were then discounted for lack of marketability and control of the Plymouth Rock shares by 30% and 40%, a range management believes market participants would apply. Management presented and discussed the above information with the Corporation’s directors, who selected the value for the investment.

 

   
 

 

Significant 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. Significant increases (decreases) in the discount for lack of marketability or cost of capital in isolation would have resulted in a lower (higher) range of fair values.

 

Effective January 1, 2020, the Corporation adopted Accounting Standards Update 2018-13, “Fair Value Measurement (Topic 820) — Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”), which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. Management has determined that there is no material impact on the applicable financial statement disclosures as a result of the adoption of ASU 2018-13.

 

3. Restricted Securities - The Corporation may from time to time invest in securities the resale of which is restricted. On September 30, 2020, 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 $206,074,000 at September 30, 2020, which was equal to 22.4% 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, 2020, unrealized appreciation from the Corporation’s investment in Plymouth Rock decreased by $9,948,400 and the Corporation received dividends of $14,163,111 from Plymouth Rock. The Chief Executive Officer of the Corporation is a director of Plymouth Rock. The President of the Corporation is a director of certain subsidiaries of Plymouth Rock.