In this article, we discussed Mario Gabelli’s GAMCO Investors’ top 10 stock holdings. You can skip our detailed discussion of Gabelli’s investment philosophy, his fund’s performance and go directly to Billionaire Mario Gabelli’s Top 5 Stock Picks.
Mario Gabelli is an American billionaire and hedge fund manager who founded Gamco Investors, a Rye, New York-based investment firm that manages over $10.6 billion in securities as of the end of the fourth quarter. Gabelli, 78, was born in The Bronx. The son of Italian immigrants used to read finance news and company reports for fun and bought his fist stock at the age of 13. Today, his worth stands at around $1.8 billion. Gabelli rose to fame in the 1980s for his successful bets on the media and telecom industries. Gabelli graduated from Fordham University. In 2014, the billionaire donated $35 million to the university, the biggest donation received by the institution in its 179-year history.
Gabelli’s investment philosophy is rooted in the principles of legendary investors Benjamin Graham and David Dodd. He is a value investor who likes to gauge the “private market value” of a stock before investing. This strategy strives to strip a stock off all kinds of hype see what would it be worth in the private market.
GAMCO Investors’ GAMCO All Cap Value (UCITS) – Class I USD fund delivered a loss of 6.75% in 2015, but rebounded sharply the next year with a return of 8.87%. In 2017, GAMCO All Cap Value (UCITS) – Class I USD fund returned 14.55%. Through October 29, 2018, the fund had delivered returns of 3.70%, giving it a compound annual return of 5.63%. GAMCO isn’t the only hedge fund struggling to post impressive gains. The hedge fund industry’s reputation has been tarnished in the last decade during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s strategy of focusing on the top picks of over 800 hedge funds has helped it consistently beat the market over the last several years. We launched our monthly newsletter’s activist strategy nearly 4 years ago and this strategy’s picks returned 187.5% since then and beat the SPY by 111 percentage points. Our short strategy was also launched 4 years ago and its short recommendations gained a cumulative 8% (that’s a good thing because we are shorting them) since then. You can improve your returns by subscribing to our premium newsletters. Our subscription prices start at $6.99 per month and come with a 14-day full refund guarantee.
In December 2020, Gabelli in an interview shared why he remains optimistic about 2021 and discussed some important elements of the modern financial markets.
Mario Gabelli on Why He Remains Optimistic in 2021
Mario Gabelli said in the interview that the global economy is equivalent to $9.1 trillion, with China occupying 18.1% of the entire economy, while the United States accounting for 25%. Gabelli thinks there is a long runway for the housing and automobile sectors. Leisure and travel are also expected to rebound amid the mass availability of the coronavirus vaccines.
“You need an element of support for a certain part of the population, particularly if you’re dealing in restaurants if you are in small businesses. But stepping back, we need an infrastructure bill.”
Gabelli emphasized the importance of infrastructure spending in the country, noting that over 500,000 bridges in the United States have ‘D-‘ to ‘D+’ ratings. According to Gabelli, the country needs a lot of work on inland waterways, canals, roads and highways. He hopes that the new administration can particularly focus on this need. The billionaire also said that investing in green energy projects will be beneficial for the entire economic ecosystem.
“The other one that I did not mention was broadband. We have to do what they did in the 1930s when we did a plain old telephone service, where we did utilities in rural America, and so broadband is another area that we need to put money in.”
The Importance of Investing in “Unloved Stocks”
“What will make it even a $100 stock over the next 2 or 3 years? That’s what we try to figure out. We think we’ve figured it out… The point is that there are many unloved companies that we like to focus on and our clients already own those.”
Let’s start our list of billionaire Mario Gabelli’s top 10 stock picks. But before that, here’s a quote from him:
“That’s my approach to life: Go where others fear to tread. Hell, I bought a Cadillac in the middle of the oil embargo.”
10. Kaman Corporation (NYSE: KAMN)
Kaman Corporation’s business is centered on aerospace. The company sells aircraft components like super precision, miniature ball bearings, composite aerostructures, arming solutions for missile and bomb systems and helicopter parts and services. The company currently has a $1.5 billion market capitalization. For the past 3 months, KAMN delivered a 3.09% return and settled at $55.11 per share at the closing of February 17th.
Based on GAMCO Investors’ SEC 13F filings at the end of the fourth quarter, they currently own 2.1 million shares of Kaman Corp. worth $119.49 million, as of December 31, 2020. KAMN accounts for 1.11% of GAMCO’s total portfolio. Another major stakeholder of Kaman is Cardinal Capital, which owns 1,266,453 KAMN shares.
9. Mueller Industries, Inc. (NYSE: MLI)
Mueller Industries specializes in copper and copper alloy manufacturing. The company also produces items that are made from steel and aluminum. MLI currently has a $2 billion market capitalization and was able to deliver a 12.52% return in the past 3 months.
As of the end of the fourth quarter of 2020, GAMCO Investors holds $119.94 million worth of MLI shares. GAMCO is followed by Gates Capital Management and Royce & Associates with 1,539,576 and 784,409 MLI shares, respectively.
8. Crane Co. (NYSE: CR)
Crane Co is a premier manufacturer of bathroom fixtures in America. The company serves different markets and fields such as oil, gas, pharmaceutical, transportation, aerospace and defense. Crane Co. currently has a $4.78 billion market capitalization. It delivered a decent 26.55% return in the past 3 months and settled at $83.46 per share at the closing of February 17th.
Mario Gabelli’s hedge fund owns $120.35 million worth of CR shares.
7. CNH Industrial N.V. (NYSE: CNHI)
Ranking 7th on our list of billionaire Mario Gabelli’s top 10 stock picks is CNH Industrial. It is an agricultural and construction equipment designer and manufacturer. The company recently released a disclosure stating that they support the growing hemp industry in North America. CNHI Industrial currently has a $19.1 billion market capitalization and was able to deliver a 47.70% return in the past 12 months.
GAMCO Investors owns 9,978,129 shares of CNH, worth $128.1 million.
6. American Express Company (NYSE: AXP)
American Express ranks 6th on the list of billionaire Mario Gabelli’s top 10 stock picks. It is a global financial services corporation that operates in more than 130 countries. American Express currently has a $102 billion market capitalization. For the past 3 months, AXP was able to deliver an 11% return and settled at $128.56 per share at the closing of February 17th.
With a $129.4 million stake invested in American Express, GAMCO Investors currently owns 1,070,255 shares of the company as of the end of the fourth quarter of 2020.
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