5 Favorite Stocks of Mario Gabelli

2. Sony Group Corporation (NYSE:SONY)

GAMCO Investors’ Stake Value: $233,463,000

Percentage of GAMCO Investors’ 13F Portfolio: 1.99%

Number of Hedge Fund Holders: 28

Sony Group Corporation (NYSE:SONY) was incorporated in 1946 and is headquartered in Tokyo, Japan. It is a multinational conglomerate that specializes in computer hardware, consumer electronics, films and TV shows, robots, semiconductors, telecommunications equipment, and video games. Securities filings for Q4 2021 disclosed that Mario Gabelli owns 1.8 million Sony Group Corporation (NYSE:SONY) shares, worth $233.4 million, representing 1.99% of the total 13F securities. 

On April 13, CLSA analyst Amit Garg downgraded Sony Group Corporation (NYSE:SONY) to Outperform from Buy with a price target of 13,000 yen, down from 18,600 yen. According to the analyst, global peer multiples have declined sharply and Sony Group Corporation (NYSE:SONY)’s earnings growth is forecasted to slow drastically from fiscal 2023. Further, the cash flow will probably be spent in games to counter competition, which yields low returns, added the analyst.

Among the hedge funds tracked by Insider Monkey, 28 funds were long Sony Group Corporation (NYSE:SONY) at the end of December 2021, collectively owning stakes worth $610 million. Brandon Haley’s Holocene Advisors is a prominent position holder in the company, with 904,051 shares valued at $114.2 million. 

Here is what Cooper Investors has to say about Sony Group Corporation (NYSE:SONY) in its Q4 2021 investor letter:

“In recent years we have observed a growing market for music rights which represent another way for owners of record labels and music libraries like portfolio holdings Warner Music Group and Sony (via its subsidiary Sony Music, ~25% of our estimated enterprise value) to deploy capital, grow their businesses and create value for shareholders.

In the first few days of 2022 Warner closed a deal to acquire David Bowie’s back catalog for about US$250m which follows on from Bruce Springsteen’s catalog sale to Sony for upwards of US$500m and Bob Dylan’s sale to Universal Music for a similar amount.

The trend in demand for music copyrights is clearly strengthening, with competition for these assets coming from traditional music companies (Warner, Sony) as well as specialist investors and private equity…” (Click here to see the full text)