A Look at the Five Largest Holdings of This Billionaire Investor

Mario Gabelli‘s GAMCO Investors is one of the funds that has been consistently beating the S&P 500 over the long term, since its inception in 1986. Mr. Gabelli is one of the few direct followers of the Graham and Dodd investing approach, which started the value investing strategy. Mr. Gabelli is known for his successful bets on companies that have high chances of being taken over, since his strategy involves assessing a public company’s potential from the perspective of an acquirer, which means a focus on its cash flow rather than earnings. GAMCO has recently revealed its 13F filing for the third quarter, in which it disclosed a significant reduction in most of its top holdings. Overall, GAMCO’s portfolio had a value of $15.22 billion, down from $18.46 billion disclosed a quarter earlier. In this article, we will take a look at GAMCO’s five largest holdings, represented by stocks from the Consumer, Industrial, and Financial sectors. These sectors collectively represent around 60% of its equity portfolio.

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Let’s start with Cablevision Systems Corporation (NYSE:CVC), in which GAMCO owns 9.94 million shares worth $322.77 million as of the end of September. During the third quarter, while the stock surged by 36%, GAMCO reduced its position in the company by 13%. As stated earlier, Mr. Gabelli often bets on companies that have the potential to be taken over, and Cablevision Systems Corporation (NYSE:CVC) was one such bet that paid off, as in September, Cablevision agreed to be acquired by Netherlands-based Altice in a $17.7 billion deal, which values the company at $34.90 per share. Overall the stock has gained over 57% since the beginning of the year. During the third quarter, Jonathan Lourie and Stuart Fiertz’s Cheyne Capital initiated a stake of 746,549 shares in Cablevision Systems Corporation (NYSE:CVC).

In Bank of New York Mellon Corp (NYSE:BK), GAMCO also trimmed its position by 8% to 6.15 million shares valued at $240.62 million. Bank of New York Mellon recently reported its financial results for the third quarter, which showed a decline in both EPS and revenue compared with the year-ago period, although the earnings per share of $0.74 were above the estimates of $0.71. On the other hand, revenue of $3.79 billion was below the projected $3.87 billion. Earlier this year Gabelli said that he likes Bank of New York Mellon Corp (NYSE:BK) because of its good fundamentals, but he also likes the fact that the company is currently targeted by activist investor Nelson Peltz of Trian Partners, who has been trying to spin-off the bank’s custody business. John Horseman’s Horseman Capital Management is another shareholder of Bank of New York Mellon Corp (NYSE:BK), owning 1.22 million shares as of the end of September.

Ryman Hospitality Properties Inc (NYSE:RHP) represents GAMCO’s third-largest holding as of the end of September, the fund reporting ownership of 4.78 million shares worth $253.14 million, down by 5% on the quarter. Ryman Hospitality Properties Inc (NYSE:RHP) is an REIT that operates hotels and its stock sports a dividend yield of 5.41%, one of the highest in the industry. Its stock has inched down by 1% since the beginning of the year, but insiders have been bullish on the company and have bought shares in multiple transactions, the last of which was made by Chairman and CEO Colin Reed, who bought 6,658 shares on October 15. Bernard Selz‘s Selz Capital reduced its stake in Ryman Hospitality Properties Inc (NYSE:RHP) by 108,000 shares during the third quarter as it disclosed ownership of 257,400 shares in its latest 13F filing.

American Express Company (NYSE:AXP) is another one of GAMCO’s bets, as the investor disclosed a $204.14 million stake that contains 2.75 million shares. During the third quarter, GAMCO unloaded 254,770 shares of American Express Company (NYSE:AXP) and has been cutting its exposure to the company throughout the year. Last week, several analysts issued updates on the stock, including Credit Suisse, which reaffirmed its ‘Sell’ rating and cut its price target on it to $71 from $74, and Argus, which reiterated a ‘Buy’ rating with a price target of $84, compared to $88 set earlier. Yesterday, UBS downgraded the stock to ‘Sell’ from ‘Neutral’, citing concerns related to the recent break-up between American Express Company (NYSE:AXP) and Costco Wholesale Corporation (NASDAQ:COST). Billionaire Ken Fisher‘s Fisher Asset Management is also bullish on American Express, holding 11.58 million shares as of the end of September.

Finally, in Honeywell International Inc. (NYSE:HON), GAMCO trimmed its stake by 3% during the previous quarter, reporting the holding of 2.08 million shares worth $197.08 million through its latest 13F. The stock lost 6% during the third quarter, which trimmed its year-to-date gains to just 2%. Honeywell International Inc. (NYSE:HON)’s shares are relatively cheap, trading at around 15.60-times forward earnings, almost in line with the S&P 500, while analysts have a consensus ‘Buy’ rating on the stock. The aforementioned Fisher Asset Management is another shareholder of Honeywell International Inc. (NYSE:HON), owning 433,448 shares as of the end of September, which represent an increase of 119,738 shares during the quarter.

Disclosure: None