5 Best Value Stocks to Buy in 2023 According to Billionaire Mario Gabelli

In this article, we discuss 5 best value stocks to buy in 2023 according to billionaire Mario Gabelli. If you want to see more stocks in this selection, check out 10 Best Value Stocks to Buy in 2023 According to Billionaire Mario Gabelli. 

5. Gold Fields Limited (NYSE:GFI)

Stake Value of GAMCO Investors: $771,228

Number of Hedge Fund Holders: 12

Gold Fields Limited (NYSE:GFI) is a South African gold production company that possesses reserves and resources in Chile, South Africa, Ghana, West Africa, Australia, and Peru. In addition to its gold operations, the company is involved in the exploration of copper deposits. In Q1 2023, Mario Gabelli added Gold Fields Limited (NYSE:GFI) to his portfolio by acquiring 57,900 shares worth $771,228. It is one of the best value stocks to invest in according to the billionaire. 

On May 3, HSBC analyst Leroy Mnguni downgraded Gold Fields to Reduce from Hold and adjusted the price target to ZAR 220, an increase from ZAR 209. The analyst highlighted that the South African gold miners, including Gold Fields Limited (NYSE:GFI), have exhibited better performance compared to their peers and are currently trading at higher valuation multiples. Consequently, the analyst no longer perceives Gold Fields Limited (NYSE:GFI) as being attractively priced. The downgrade of Gold Fields Limited (NYSE:GFI) is influenced by the recent outperformance of the gold sector as a whole.

According to Insider Monkey’s first quarter database, Gold Fields Limited (NYSE:GFI) was part of 12 hedge fund portfolios, compared to 17 funds in the prior quarter. William B. Gray’s Orbis Investment Management is the largest stakeholder of the company. 

Here is what Baron Funds specifically said about Gold Fields Limited (NYSE:GFI) in its Q2 2022 investor letter:

“Gold Fields Limited (NYSE:GFI) is an established gold producer based in South Africa with a diversified global portfolio of precious metals assets. Shares fell due to the pullback in gold prices and the company’s announced acquisition of gold producer Yamana Gold at a large premium. We are positive on gold prices and expect continuous improvements in Gold Fields’ cash costs. We expect at least 50% production growth over the next decade as the company ramps up volumes, including Yamana’s high quality development projects in Chile, Canada, and Brazil.”

4. Univar Solutions Inc. (NYSE:UNVR)

Stake Value of GAMCO Investors: $920,413

Number of Hedge Fund Holders: 42

Univar Solutions Inc. (NYSE:UNVR) is a global distributor of both commodity and specialty chemical products for different industries. Securities filings for Q1 2023 reveal that Mario Gabelli’s GAMCO Investors bought 26,275 shares of Univar Solutions Inc. (NYSE:UNVR) worth $920,413. It is one of the top value stock picks of the billionaire in 2023. 

On May 8, Univar Solutions Inc. (NYSE:UNVR) reported a Q1 non-GAAP EPS of $0.63 and a revenue of $2.68 billion, outperforming Wall Street estimates by $0.05 and $250 million, respectively. 

According to Insider Monkey’s first quarter database, 42 hedge funds were bullish on Univar Solutions Inc. (NYSE:UNVR), compared to 40 funds in the prior quarter. Matthew Halbower’s Pentwater Capital Management is the biggest stakeholder of the company, with 5.75 million shares worth $201.4 million. 

Meridian Contrarian Fund made the following comment about Univar Solutions Inc. (NYSE:UNVR) in its Q4 2022 investor letter:

“Univar Solutions Inc. (NYSE:UNVR) is the second largest distributor of industrial and specialty chemicals in the world, serving as a key logistics and sourcing partner across the coatings and lubricants industries and, increasingly, in the food and pharmaceutical industries. Following several years of volatile results, management took a variety of steps to sharpen Univar’s strategy, including divesting several commodity businesses, revamping sales practices to a consultative approach, and integrating a singular enterprise resource planning platform. During the quarter, the stock rallied as the company delivered a strong set of operational results and was the subject of an acquisition rumor. As we anticipate more operational success, we maintained our exposure.”

3. Philip Morris International Inc. (NYSE:PM)

Stake Value of GAMCO Investors: $2,282,458

Number of Hedge Fund Holders: 55

Philip Morris International Inc. (NYSE:PM), the American tobacco giant, was one of the newest additions in Mario Gabelli’s hedge fund. The billionaire purchased 23,470 shares of the company worth $2.28 million as of March end, making it one of the top value plays in his Q1 2023 portfolio. 

On April 13, Stifel resumed coverage of Philip Morris International Inc. (NYSE:PM) with a Buy rating and a $114 price target. The analyst considers Philip Morris International Inc. (NYSE:PM) to be one of the top investment opportunities within the industry, citing its potential for “exceptional growth” compared to other companies in the tobacco and consumer staples sectors.

According to Insider Monkey’s first quarter database, 55 hedge funds were long Philip Morris International Inc. (NYSE:PM), compared to 47 funds in the last quarter. Rajiv Jain’s GQG Partners is the largest stakeholder of the company, with 21.5 million shares worth over $2 billion.

Artisan Value Income Fund made the following comment about Philip Morris International Inc. (NYSE:PM) in its Q4 2022 investor letter:

“Our top individual contributors were Philip Morris International Inc. (NYSE:PM), EOG Resources and Merck. Despite being US-based, tobacco company PM derives all its sales from outside the US. As a result, foreign exchange impacts can be an important driver of near-term returns, and the recent weakening in the US dollar should provide a strong tailwind for earnings due to translation effects. However, our investment case is not tied to currency movements. By virtue of its globally known brands, PM is the best-in-class operator with a well-diversified business, particularly by geography. We believe its next generation heat-not-burn product IQOS should gain share as consumers continue migrating to safer tobacco delivery systems. The company is progressing toward its acquisition of Swedish Match, a Swedish tobacco and nicotine products maker, which was previously held in the portfolio. The deal is a good fit for PM as it reduces PM’s dependence on cigarettes—a category in steady decline—and accelerates the company’s transition to smokeless “reduced-risk” products (RRPs)—a category that has experienced rapid growth over the past five years. PM can also leverage its global scale to generate significant revenue synergies from these complementary product sets, as well as quickly gain access to the US market—the world’s largest market for RRPs and one where regulators have embraced RRPs and other less harmful nicotine products. Looking at PM through our margin-of-safety criteria, the business trades for an undemanding valuation and has extraordinary business economics and a strong credit profile.”

2. TravelCenters of America Inc. (NASDAQ:TA)

Stake Value of GAMCO Investors: $7,539,773

Number of Hedge Fund Holders: 26

TravelCenters of America Inc. (NASDAQ:TA) is an operator of travel centers, truck service facilities, and restaurants in the United States and Canada. In Q1 2023, Mario Gabelli increased his stake in TravelCenters of America Inc. (NASDAQ:TA) by 137%, holding 87,165 shares worth $7.5 million. It is one of the top value picks of the billionaire this year.

On February 17, BMO Capital analyst Ari Klein raised the firm’s price target on TravelCenters of America Inc. (NASDAQ:TA) to $86 from $60 and kept a Market Perform rating on the shares, in light of the company’s agreement to be acquired by BP at $86 per share. According to the analyst, the acquisition is expected to provide increased scale and synergies, and the regulatory risk is anticipated to be minimal due to the fragmented nature of the travel center market.

According to Insider Monkey’s first quarter database, 26 hedge funds were bullish on TravelCenters of America Inc. (NASDAQ:TA), up from 15 funds in the prior quarter. Magnetar Capital is the largest position holder in the company.

Bernzott Capital Advisors US Small Cap Value made the following comment about TravelCenters of America Inc. (NASDAQ:TA) in its Q1 2023 investor letter:

“Consumer Discretionary contributed positively due to the 80.6% gain in TravelCenters of America Inc. (NASDAQ:TA). We initiated the position early in the quarter, finding appeal in enhanced earnings power from internal management initiatives such as upgraded IT systems, better execution in the non-fuel part of the business, and franchising opportunities for capital-light expansion. The stock jumped in February when BP agreed to acquire the company for cash at a significant premium.”

1. Garrett Motion Inc. (NASDAQ:GTX)

Stake Value of GAMCO Investors: $7,891,753

Number of Hedge Fund Holders: 29

Garrett Motion Inc. (NASDAQ:GTX) specializes in designing, manufacturing, and selling turbocharger and electric-boosting technologies for original equipment manufacturers (OEMs) of light and commercial vehicles. The company offers turbochargers for gasoline and diesel engines in light vehicles, as well as commercial vehicle turbochargers. In Q1 2023, Mario Gabelli boosted his position in Garrett Motion Inc. (NASDAQ:GTX) by 99%, holding a stake worth $7.8 million as of the end of March.

While the company reported mixed Q1 earnings, it reaffirmed its FY 2023 outlook. The projected net sales range for Garrett Motion Inc. (NASDAQ:GTX) is between $3.79 billion and $3.98 billion, versus the consensus estimate of $3.82 billion. As for net income (GAAP), it is expected to fall within the range of $231 million to $268 million. In terms of adjusted EBITDA (Non-GAAP), the forecasted range is between $585 million and $635 million.

According to Insider Monkey’s first quarter database, 29 hedge funds were long Garrett Motion Inc. (NASDAQ:GTX), compared to 25 funds in the earlier quarter. Howard Marks’ Oaktree Capital Management is the largest stakeholder of the company.

Alluvial Capital Management made the following comment about Garrett Motion Inc. (NASDAQ:GTX) in its Q4 2022 investor letter:

“On the topic of superchargers, our investment in Garrett Motion Inc. (NASDAQ:GTX) preferred shares is performing well. Garrett Motion shares have been rising as the semiconductor supply chain normalizes, unsnarling automotive production. Additionally, rumors of a possible sale began swirling in November. The company has not commented on the rumors, but an eventual sale has always been the most likely outcome for Garrett Motion. Should a sale come to pass, I think holders of Garrett’s convertible preferreds can expect at least $12.”

Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily enewsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also check out Billionaire John Paulson’s 2023 Portfolio: Top 15 Stock Picks and 10 Stocks to Sell in 2023 According to Billionaire Steve Cohen.