In this piece, we will take a look at the ten best Mario Gabelli stocks that other billionaires can't get enough of. If you want to skip our overview of Mr. Gabelli and his hedge fund, then you can skip ahead to 5 Best Mario Gabelli Stocks Other Billionaires Are Also Piling Into.
Mario Gabelli is a billionaire American hedge fund investor who is at the helm of affairs at GAMCO Investors. GAMCO is a multi billion dollar hedge fund headquartered in Rye, New York. According to Insider Monkey's research, the firm's latest investment portfolio is worth $8.6 billion - making it one of the largest financial firms in the world. It was set nearly five decades back in 1976, and it went on to beat the S&P 500 index by more than 2% each year in 1986. The investment firm offers its clients a variety of portfolios and vehicles to park their money in via its Gamco Funds division. These include open and closed end mutual funds, as well as exchange traded funds (ETFs) and money market investments. Additionally, GAMCO also has its own asset management division called GAMCO Asset Management. This division is quite important in the firm's history since Mr. Gabelli's fund was previously called Gabelli Asset Management Company and then changed its name to GAMCO in 2005.
The GAMCO Asset Management business division identifies itself as a value investor. This approach is practiced by industry behemoths such as Warren Buffett of Berkshire Hathaway and Seth Klarman of Baupost Group. Fundamentally (no pun intended) value investing determines a stock's fair value based on its ability to earn revenue in the future. This value is then compared to the current market price of a security, typically a stock. If the fair value is higher than the market value, then a buying decision is made based on the percentage difference between the two values called the margin of safety.
Additionally, the asset management arm of the hedge fund also focuses on growth stocks. GAMCO claims to invest "in companies with above average growth in earnings, cash flow or asset values which we believe will provide excellent investment returns over time. These companies typically have strong balance sheets, leading market positions and visible long term growth prospects." The stated objective of the GAMCO Asset Management growth division is to outperform the Russell 2000 index of small cap stocks by 2%.
On the flip side, the value division uses an equity research team of 40 analysts to pick out value stocks. However, GAMCO doesn't invest in any value stock. Instead, a fundamental condition for investment is the presence of a catalyst that will generate value in the future. A catalyst can be anything. For instance, if company A is a rocket company making engines, then its catalyst can be an advanced composite material that can increase chamber pressures in a rocket engine's combustion chamber to improve power output. If you're interested in value stocks, then check out 12 Best Value Stocks To Buy Heading Into 2024 (Picked By Seth Klarman).
GAMCO is also one of the few hedge funds that are publicly traded as stocks. Its ticker name is GAMCO Investors, Inc. (OTC:GAMI) and the firm's latest market capitalization at the time of writing is $476 million. Since it's a publicly traded firm, GAMCO Investors, Inc. (OTC:GAMI) has to post its earnings reports regularly and the latest set of results are for the firm's third quarter. This quarter, which saw the stock market continuously readjust itself to the Fed's future interest rate policies, saw GAMCO post $59.4 million in revenue and $13 million in net income. While the revenue dropped by 3.9% annually, the net income jumped by 39.4% as the year ago quarter had seen the firm take a $2.4 million non operating loss. GAMCO Investors, Inc. (OTC:GAMI)'s Class A and B investors are also entitled to a dividend, with the latest dividend being 4 cents.
Since 2023 is ending with lingering worries of a recession and global slowdown, here's what Mr. Gabelli believes is happening in the economy:
But when you step back and say okay, what is the world like for investing. Forget about short termism in the market which is dominant because of a variety of things. Basically the International Monetary Fund says there's a $110 trillion of - trillion - dollars of global GDP. The United States is 25%, China is 17%, Europe is about 17-8, a lower number. So what's going in China. What's gonna be the implications of that on the global market place. What's going on in United States. You break the U.S. down, consumer 70% plus or minus, then you've got industrial, then you've got government spending and blah blah blah.
So, what stocks are Mario Gabelli and billionaires buying? We took a look and some notable names are Honeywell International Inc. (NASDAQ:HON), Lands' End, Inc. (NASDAQ:LE), and American Express Company (NYSE:AXP).
10 Best Mario Gabelli Stocks Other Billionaires Are Also Piling Into
Mario Gabelli of GAMCO Investors
Our Methodology
To make our list of the best Mario Gabelli stocks that billionaires are buying, we ranked GAMCO's 40 biggest Q3 2023 investment positions by the number of billionaires that had bought the shares. Out of these, the ones with the highest billionaire investors were chosen.
10 Best Mario Gabelli Stocks Other Billionaires Are Also Piling Into
Genuine Parts Company (NYSE:GPC) is an American spare parts company that caters to the needs of automotive and industrial users. Despite trouble in both these sectors in 2023, the firm has beaten analyst EPS estimates in all four of its latest quarters and the shares are rated Buy on average with an average share price target of $153.64.
During Q3 2023, 34 out of the 910 hedge funds profiled by Insider Monkey had held a stake in Genuine Parts Company (NYSE:GPC). Peter Rathjens, Bruce Clarke, and John Campbell's Arrowstreet Capital was the firm's biggest shareholder as it owned 874,550 shares that are worth $126 million.
Just like Lands' End, Inc. (NASDAQ:LE), Honeywell International Inc. (NASDAQ:HON), and American Express Company (NYSE:AXP), Genuine Parts Company (NYSE:GPC) is a stock that Mario Gabelli and billionaires are buying.
AMETEK, Inc. (NYSE:AME) is an industrial products provider that sells instruments, blowers, metals, and other products. The firm expanded its presence in the medical industry in December 2023 when it bought another company for $1.9 billion.
By the end of September 2023, 38 among the 910 hedge funds tracked by Insider Monkey were the firm's investors. AMETEK, Inc. (NYSE:AME)'s largest hedge fund investor is Phill Gross and Robert Atchinson's Adage Capital Management due to its $159 million stake.
Madison Square Garden Sports Corp. (NYSE:MSGS) is an American company known for its basketball and hockey franchises. Its first quarter of fiscal 2024 financial results showed the firm posting a 79% annual revenue growth on the back of league distributions.
During 2023's third quarter, 39 out of the 910 hedge funds part of Insider Monkey's database had bought Madison Square Garden Sports Corp. (NYSE:MSGS)'s shares. Jim Davidson, Dave Roux, and Glenn Hutchins's Silver Lake Partners was the biggest investor courtesy of its $334 million investment.
7. The Bank of New York Mellon Corporation (NYSE:BK)
Number of Billionaire Investors In Q3 2023: 11
The Bank of New York Mellon Corporation (NYSE:BK) is a diversified American financial services company that offers wealth management, depository, retirement, and other products and services. The firm was out with some great news for employees in December 2023 when it shared that starting next year, minimum wage and employee health benefits will rise.
As of September 2023 end, 51 out of the 910 hedge funds surveyed by Insider Monkey had held a stake in the company. The Bank of New York Mellon Corporation (NYSE:BK)'s largest hedge fund shareholder is Jean-Marie Eveillard's First Eagle Investment Management due to its $692 million stake.
Republic Services, Inc. (NYSE:RSG) is a waste management company with hundreds of collection points all over America. Trash is king, it seems, as the firm has beaten analyst EPS estimates in all four of its latest quarters and consecutively sequentially grown its EPS in all of them.
After digging through 910 hedge funds for their Q3 2023 holdings, Insider Monkey found 37 Republic Services, Inc. (NYSE:RSG) investors. Ian Simm's Impax Asset Management was the biggest investor as it owned $310 million worth of shares.
Honeywell International Inc. (NASDAQ:HON), Lands' End, Inc. (NASDAQ:LE), Republic Services, Inc. (NYSE:RSG), and American Express Company (NYSE:AXP) are some stocks that Mario Gabelli and billionaires can't get enough of.
