5 Best Cheap Stocks to Buy According to Billionaire Mario Gabelli

1. CNH Industrial N.V. (NYSE: CNHI)

Number of Hedge Fund Holders: 23     

CNH Industrial N.V. (NYSE: CNHI) is a London-based company that makes and sells agricultural and construction equipment. It is ranked first on our list of 10 best cheap stocks to buy according to billionaire Mario Gabelli. CNH stock has returned more than 180% to investors over the course of the past twelve months. GAMCO Investors holds more than 9.9 million shares in the manufacturing company worth over $154 million, representing 1.35% of their portfolio. 

In quarterly earnings results for the first quarter of 2021, posted on May 5, CNH Industrial N.V. (NYSE: CNHI) reported earnings per share of $0.32, beating market estimates by $0.18. The revenue over the period was over $7 billion. 

Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Harris Associates is a leading shareholder in CNH Industrial N.V. (NYSE: CNHI) with 149 million shares worth more than $2.3 billion.  

In its Q1 2021 investor letter, Longleaf Partners Fund, an asset management firm, highlighted a few stocks and CNH Industrial N.V. (NYSE: CNHI) was one of them. Here is what the fund said:

“CNH Industrial (CNH) (23%, 1.19%), one of the world’s largest agriculture machinery manufacturers, was another top contributor. CNH reported strong fourth quarter results, beating the consensus on every metric. The Agricultural Equipment (Ag) business, which represents the majority of our value, posted strong top-line growth of 19% YoY thanks to rising commodity prices, growing trade with China and the replacement of aging machinery fleets. Visibility for the first half of 2021 is strong, given solid Ag order growth across most key end markets, and we expect to see operational turnarounds in CNH’s other businesses. The company is also guiding 8-12% industrial sales growth for 2021, which is better than our initial expectation. The most positive surprise for the quarter was the company’s strong cash generation. CNH generated approximately $2.4bn FCF in the fourth quarter alone, driven by working capital release leading to a strong net cash position for the industrial segment. Due to the recent stock price appreciation, the price-to-value gap has narrowed, but we continue to have a positive view given a more favorable market outlook, the company’s strong execution capability and management’s continued commitments to value accretive transactions, including the planned splitting of the business and potentially other strategic asset sales.”

You can also take a peek at Eagle Capital’s Top 10 Stock Picks and Billionaire David Siegel’s Top 10 Stock Picks.

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