In this article, we will take a look at billionaire Gabelli’s 5 stock picks with huge upside potential. To read our analysis of Gabelli’s investment strategy and GAMCO Investor’s previous performance, you can go to the Billionaire Gabelli’s 10 Stock Picks with Huge Upside Potential.
5. CNH Industrial N.V. (NYSE:CNHI)
GAMCO Investors’ Stake Value: $106,173,870
Upside Potential as of November 28: 43.88%
CNH Industrial N.V. (NYSE:CNHI) is a world-class capital goods company specializing in equipment and services for Agriculture and Construction. Its brand portfolio includes brands Case IH, New Holland Agriculture, CASE and New Holland Construction Equipment.
According to Insider Monkey data on 910 hedge funds, 29 hedge funds held shares of CNH Industrial N.V. (NYSE:CNHI), valued at $590 million, as of Q3 2023. GAMCO Investors held 8.8 million shares of the company, valued at $106 million. It accounted for 1.23% of the firm’s 13F portfolio, the second highest on our list.
In its Q3 2023 investor letter, Oakmark Funds, advised by Harris Associates, made the following comments about CNH Industrial N.V. (NYSE:CNHI):
“CNH Industrial’s share price fell following its second quarter results, as agriculture equipment sales rose 5% in local currency, a slowdown from the prior quarter. This performance fell below market expectations due to destocking activity in Brazil and some production ramp-up issues for its new Patriot sprayer. We believe the production issues are temporary while the destocking actions will better position the business for the midterm. Pricing power remains quite strong and increased by roughly 7%, and precision agricultural sales grew by 21%. While the market was overly focused on near-term demand and sales growth, the agriculture equipment division produced its highest quarterly margin ever at 16.8%—an encouraging development that supports our view of the company’s long-term profitability. Further, the much smaller construction business delivered strong results, including its own quarterly margin record. Management maintained guidance for the rest of the company’s current fiscal year and indicated it expects to exceed the 2024 targets laid out at a capital markets day in 2022. [. . .] We believe CNH Industrial remains a solid business in an attractive industry that is run by a much-improved management team.”
4. Griffon Corporation (NYSE:GFF)
GAMCO Investors’ Stake Value: $64,013,019
Upside Potential as of November 28: 43.99%
Griffon Corporation (NYSE:GFF) is a diversified management and holding company that conducts business through wholly owned subsidiaries. Its products include garage doors and rolling steel doors, consumer and professional tools, residential, industrial, and commercial fans, and home storage and organization products, among others.
On November 15, Griffon Corporation (NYSE:GFF) released its financial results for the quarter ended September 30, 2023. Its revenue declined by 10% y-o-y to $641 million while it posted a net income of $42 million, compared to a net loss of $417 million.
On the same day, the Board of Directors of Griffin Corporation (NYSE:GFF) authorized the repurchase of an additional $200 million worth of shares of the company which brings total share repurchase authorization to $262 million. It also declared a regular quarterly dividend of $0.15 per share, 20% more than previous quarter’s dividend.
3. Madison Square Garden Sports Corp. (NYSE:MSGS)
GAMCO Investors’ Stake Value: $100,319,108
Upside Potential as of November 28: 46.26%
Madison Square Garden Sports Corp. (NYSE:MSGS) is a leading professional sports company with assets including the New York Knicks (NBA) and the New York Rangers (NHL), as well as two development league teams – the Westchester Knicks (NBAGL) and the Hartford Wolf Pack (AHL). It also operates MSG Training Center in Greenburgh, a professional sports team performance center.
Madison Square Garden Sports Corp. (NYSE:MSGS) posted a strong quarterly performance in the quarter ended September 30, 2023. Its revenue increased by 79% y-o-y to $43 million while net loss remained nearly constant y-o-y at $19 million. It managed to beat consensus estimates for normalized EPS by $0.73 with quarterly figures of -$0.79.
Madison Square Garden Sports Corp. (NYSE:MSGS) ranks 3rd on our list of billionaire Gabelli’s 10 stock picks with huge upside potential. The shares of the company were owned by 39 hedge funds with a total value of $1.0 billion. GAMCO Investors 0.6 million shares of the company, valued at $100 million. The stock accounted for 1.16% weightage in the firm’s 13F portfolio.
2. Kaman Corporation (NYSE:KAMN)
GAMCO Investors’ Stake Value: $48,897,355
Upside Potential as of November 28: 49.85%
Founded in 1945, Bloomfield, Connecticut-based, Kaman Corporation (NYSE:KAMN) conducts business in the aerospace & defense, industrial, and medical markets. It provides aircraft bearings and components; super precision ball bearings; spring energized seals, springs, and contacts; wheels, brakes and related hydraulic components for helicopters, fixed-wing, and UAV aircraft; aerostructures; and safe and arming solutions for missile and bomb systems, among others.
On November 1, Kaman Corporation (NYSE:KAMN) released its financial results for the third quarter of 2023. Its revenues increased by 6% y-o-y to $183 million, while it reported a net income of $1.5 million, compared to a net loss of $0.3 million. At $0.10, its normalized EPS surpassed consensus estimates by $0.02.
As of Q3 2023, 14 of the 910 hedge funds tracked by Insider Monkey were long Kaman Corporation (NYSE:KAMN) and held shares worth $92 million. Mario Gabelli’s GAMCO Investors was its largest hedge fund shareholder with ownership of 2.5 million shares valued at $49 million. The stock accounted for 0.56% of the firm’s portfolio.
1. Hyster-Yale Materials Handling, Inc. (NYSE:HY)
GAMCO Investors’ Stake Value: $46,070,755
Upside Potential as of November 28: 66.32%
With a history that dates back to 1989, Hyster-Yale Materials Handling, Inc. (NYSE:HY) designs, engineers, manufactures, sells, and services lift trucks and aftermarket parts marketed globally primarily under the Hyster® and Yale® brand names.
On October 31, Hyster-Yale Materials Handling, Inc. (NYSE:HY) released its financial results for Q3 2023. It generated a revenue of $1.0 billion and an EPS of $2.06, surpassing consensus estimates on both figures by $69 million and $1.56, respectively.
On November 15, Northland Capital Markets analyst Ted Jackson initiated coverage of Hyster-Yale Materials Handling, Inc. (NYSE:HY) shares with an ‘Outperform’ rating and a price target of $80 per share.
As of Q3 2023, Hyster-Yale Materials Handling, Inc. (NYSE:HY) was ranked highest on our list of billionaire Gabelli’s 10 stock picks with huge upside potential. The stock was held by 16 hedge funds with the total shares held by hedge funds valued at $76 million. Mario Gabelli’s GAMCO Investors was its largest hedge fund shareholder with ownership of 1.0 million shares valued at $46 million. The stock accounted for 0.53% of the firm’s portfolio.
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