Billionaire Mario Gabelli’s Favorite Small-Caps Stocks for Q3

#3. Madison Square Garden Co (NYSE:MSG)

– Shares Owned by GAMCO Investors (as of June 30): 930,735

– Value of The Holding (as of June  30): $160.56 Million

Moving on, GAMCO Investors inched up its stake in Madison Square Garden Co (NYSE:MSG) by 1% during the second quarter. Madison Square Garden came into existence last October after it was spun off from MSG Networks Inc. (NYSE:MSGN). Though shares of the sporting company declined heavily over the next few months, they have performed well this year, rising by 15.02% year-to-date. Last month, Barron’s published an article on the company in which it argued that its stock was undervalued by as much as 35%. Madison Square Garden Co (NYSE:MSG) is expected to report its fourth quarter of fiscal year 2016 results next week and the current consensus estimate of analysts is for it to report a loss of $0.91 per share for the period. On August 9, analysts at Loop Capital reiterated their ‘Hold’ rating on the stock. D E Shaw, founded by billionaire David E. Shaw, lowered its MSG holding by 63% to 143,440 shares during the second quarter.

#2. National Fuel Gas Co. (NYSE:NFG)

– Shares Owned by GAMCO Investors (as of June 30): 3.25 Million

– Value of The Holding (as of June  30): $184.66 Million

Despite GAMCO Investors reducing its stake in National Fuel Gas Co. (NYSE:NFG) by 3% during the second quarter, the company jumped three spots in the fund’s portfolio to become its sixth-most valuable equity holding at the end of June. Owing largely to a bounce back in natural gas prices this year, National Fuel Gas Co. (NYSE:NFG)’s stock has performed well during the last few months and is currently trading up by 33.7% year-to-date. The company recently hiked its quarterly dividend payment by 2.5% to $0.41 per share, which translates into an annual dividend yield of 2.87%. On August 5, National Fuel Gas reported EPS of $0.68 on revenue of $335.60 million for its third quarter of fiscal 2016, showing solid bottom-line growth compared to the EPS of $0.55 on revenue of $339.80 million that it delivered for the same quarter of its previous fiscal year. Earlier this week, analysts at Barclays boosted their price target on the stock to $61 from $47 while keeping their rating on it unchanged at ‘Equal Weight’. Billionaire Cliff Asness‘ AQR Capital Management, which held 45,689 shares of National Fuel Gas Co. at the end of 2015, sold its entire stake  in the company during the first quarter.

#1. Ryman Hospitality Properties Inc. (REIT) (NYSE:RHP)

– Shares Owned by GAMCO Investors (as of June 30): 4.47 Million

– Value of The Holding (as of June  30): $226.48 Million

Ryman Hospitality Properties Inc. (REIT) (NYSE:RHP) continued to remain GAMCO Investors’ largest small-cap holding and its second-largest equity holding overall at the end of June. Shares of the Tennessee-based real estate investment trust (REIT) have appreciated by over 10% since the end of June and are currently trading up by 4.3% year-to-date. Ryman Hospitality Properties Inc. (REIT) (NYSE:RHP) reported better than expected second quarter numbers last week, declaring EPS of $1.59 on revenue of $293.20 million, while analysts had called for EPS of $0.95 on revenue of $291.26 million. The REIT currently pays a quarterly dividend of $0.75 per share, which translates into an annual dividend yield of 5.55%. On August 3, analysts at Deutsche Bank reiterated their ‘Buy’ rating on the stock while setting a price target of $61 on it. Jay Petschek and Steven Major’s Corsair Capital Management also lowered its holding in the REIT during the second quarter, by 15% to 573,374 shares.

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