In this article, we discuss the 10 new stock picks of billionaire Mario Gabelli. If you want to skip our detailed analysis of these stocks, go directly to the 5 New Stock Picks of Billionaire Mario Gabelli.
Mario Gabelli, the billionaire chief of New York-based GAMCO Investors, has gained prominence in the finance world through a value investing strategy that places an emphasis on the acquisition of undervalued public firms that are then overhauled and sold for a profit. The fund, which had a portfolio value of $11.7 billion at the end of the third quarter with the top holdings in the industrial goods and finance sectors, has recently also ramped up purchases in equities that are set to explode in value given potential mergers or takeovers on the horizon.
In the early 1980s, merely a few years after founding the fund, Gabelli purchased Class A shares of Berkshire Hathaway, the conglomerate led by legendary investor Warren Buffett, for $1.3 million. This initial investment, viewed at present prices, is worth almost $100 million, a gain of more than 7,000%. Gabelli has over the years built an incredibly diverse portfolio that carefully balances growth and value equities, a feat that has inspired many to follow his lead to replicate the record returns of his fund.
Some of the top stocks in the investment portfolio of GAMCO Investors at the end of September included Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT), among others discussed in detail below. Between June and September, the fund made new purchases in 57 stocks, additional purchases in 232, sold out of 51, and reduced holdings in 403 stocks. The top ten holdings comprise 15% of the entire portfolio.
Our Methodology
These were picked from the investment portfolio of GAMCO Investors at the end of the third quarter of 2021. All the stocks listed below were added to the portfolio of the fund between June and September this year.
The hedge fund sentiment around each stock was calculated using the data of 873 hedge funds tracked by Insider Monkey.
New Stock Picks of Billionaire Mario Gabelli
10. SVB Financial Group (NASDAQ:SIVB)
Number of Hedge Fund Holders: 49
SVB Financial Group (NASDAQ:SIVB) is a diversified financial services firm headquartered in California. It recently posted earnings for the third quarter, reporting earnings per share of $6.24, beating estimates by $1.11. The revenue over the period was $1.5 billion, up 40% year-on-year.
Latest data shows that GAMCO Investors owned 5,801 shares of SVB Financial Group (NASDAQ:SIVB) at the end of the third quarter of 2021 worth $3.7 million.
At the end of the second quarter of 2021, 49 hedge funds in the database of Insider Monkey held stakes worth $1 billion in SVB Financial Group (NASDAQ:SIVB), the same as in the previous quarter worth $1.2 billion.
Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in SVB Financial Group (NASDAQ:SIVB) with 641,591 shares worth more than $415 million.
Just like Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT), SVB Financial Group (NASDAQ:SIVB) is one of the stocks that hedge funds are buying.
In its Q1 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and SVB Financial Group (NASDAQ:SIVB) was one of them. Here is what the fund said:
“Among our top contributors was SVB Financial. SVB Financial Group is a leading provider of banking services to the innovation economy across the US and in key international markets. Headquartered in Silicon Valley, SVB offers financial products to clients in the technology, life science/health care and private equity/venture capital. Total client funds increased 51% to $243 billion in 2020—one of the company’s strongest years—as investors seek differentiated returns in innovative private companies. SVB’s high level of client service and long experience in the industry give it not only a historical data and knowledge advantage, but also a reputational edge. We believe this enables the company to quickly bring products to market and make speedy underwriting decisions. Given SVB’s strong profit growth comes at a time when net interest margins are depressed, we believe shares are priced attractively and added to our position.”
9. TravelCenters of America Inc. (NASDAQ:TA)
Number of Hedge Fund Holders: 7
TravelCenters of America Inc. (NASDAQ:TA) owns and runs travel centers and standalone restaurants across the United States and Canada. According to regulatory filings, GAMCO Investors owned 33,120 shares in the company at the end of September 2021 worth $1.6 million.
B Riley analyst Bryan Maher Travel recently reiterated a Buy rating on TravelCenters of America Inc. (NASDAQ:TA) stock and raised the price target to $62 from $48, noting the strong earnings beat of the firm in the third quarter and several upcoming catalysts.
Among the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm Nantahala Capital Management is a leading shareholder in TravelCenters of America Inc. (NASDAQ:TA) with 1.2 million shares worth more than $63 million.
At the end of the second quarter of 2021, 7 hedge funds in the database of Insider Monkey held stakes worth $78 million in TravelCenters of America Inc. (NASDAQ:TA), down from 10 in the previous quarter worth $88 million.
8. Five9, Inc. (NASDAQ:FIVN)
Number of Hedge Fund Holders: 45
Five9, Inc. (NASDAQ:FIVN) markets cloud services for contact centers. The company recently beat market estimates on earnings per share and revenue for the third quarter and was named among a list of top software ideas by Baird that look set to capitalize on strong operating trends in the industry.
The hedge fund of billionaire Mario Gabelli owned over 2,300 shares of Five9, Inc. (NASDAQ:FIVN) at the end of the third quarter of 2021 worth more than $367,000, representing a very small portion of the total portfolio of the fund.
At the end of the second quarter of 2021, 45 hedge funds in the database of Insider Monkey held stakes worth $2.1 billion in Five9, Inc. (NASDAQ:FIVN), the same as in the preceding quarter worth $1.6 billion.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Alkeon Capital Management is a leading shareholder in Five9, Inc. (NASDAQ:FIVN) with 3 million shares worth more than $480 million.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Five9, Inc. (NASDAQ:FIVN) was one of them. Here is what the fund said:
“Five9 is a cloud-based contact center as a service software provider that is replacing aging on-premise legacy solutions that dominate the installed base. Companies are being forced to modernize and cloud penetration is still low; Five9 is positioned to benefit and should see further growth driven by its cross-selling add-on modules and an AI product that generates high revenue.”
7. General Electric Company (NYSE:GE)
Number of Hedge Fund Holders: 67
General Electric Company (NYSE:GE) is a diversified industrial firm with interests in energy, aviation, and utilities. GAMCO Investors owned 36,513 shares in the company at the end of September 2021 worth $3.7 million, representing 0.03% of the portfolio of the fund.
On November 10, investment advisory Wells Fargo maintained an Equal Weight rating on General Electric Company (NYSE:GE) stock and raised the price target to $120 from $110, noting that the decision of the firm to break up into three units was a “statement of confidence”.
At the end of the second quarter of 2021, 67 hedge funds in the database of Insider Monkey held stakes worth $6.08 billion in General Electric Company (NYSE:GE), down from 68 in the previous quarter worth $6.16 billion.
Among the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm Viking Global is a leading shareholder in General Electric Company (NYSE:GE) with 16 million shares worth more than $1.7 billion.
In its Q1 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and General Electric Company (NYSE:GE) was one of them. Here is what the fund said:
“General Electric is outperforming our expectations for 2021 as the economic recovery is occurring faster than expected. We are particularly pleased with its free cash flow generation. We are happy to own it in our portfolio.”
6. Hill-Rom Holdings, Inc. (NYSE:HRC)
Number of Hedge Fund Holders: 22
Hill-Rom Holdings, Inc. (NYSE:HRC) is a medical technology company that operates from Illinois. It recently beat market estimates on earnings for the fourth fiscal quarter and declared a quarterly dividend of $0.24 per share, in line with previous. The forward yield was 0.62%.
Latest securities filings reveal that GAMCO Investors owned 83,891 shares in Hill-Rom Holdings, Inc. (NYSE:HRC) at the end of the third quarter of 2021 worth $12.5 million.
Among the hedge funds being tracked by Insider Monkey, Florida-based investment firm Pentwater Capital Management is a leading shareholder in Hill-Rom Holdings, Inc. (NYSE:HRC) with 1.8 million shares worth more than $277 million.
At the end of the second quarter of 2021, 22 hedge funds in the database of Insider Monkey held stakes worth $387 million in Hill-Rom Holdings, Inc. (NYSE:HRC), down from 30 in the previous quarter worth $454 million.
Alongside Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT), Hill-Rom Holdings, Inc. (NYSE:HRC) is one of the stocks attracting the attention of elite investors.
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Disclosure. None. 10 New Stock Picks of Billionaire Mario Gabelli is originally published on Insider Monkey.
