We recently published a list of 10 Best Stocks to Buy According to Billionaire Mario Gabelli. In this article, we are going to take a look at where Sony Group Corporation (NYSE:SONY) stands against other stocks to buy according to billionaire Mario Gabelli.
GAMCO Investors, formerly known as Gabelli Asset Management Company, is an investment firm with its headquarters in Rye, New York. The company has expertise in providing investment advice and brokerage services to mutual funds, institutional clients, and select investors. It was founded and is majority-owned by Mario Gabelli. Mr. Gabelli is the Chairman and Chief Executive Officer of GAMCO Investors, Inc.
GAMCO Investors’ Investment Philosophy
With respect to value, the company’s investment approach revolves around utilizing fundamental, bottom-up research to spot securities selling below their intrinsic value. Furthermore, the investment firm seeks to identify mispriced companies possessing healthy businesses and the presence of a catalyst that will surface value. The firm’s investment teams use a broad universe in the benchmark-agnostic approach to cover all sectors of the market and check evolving themes and value-based opportunities.
Investment Themes For 2025
The firm’s portfolio managers have shared themes that they believe will shape markets in 2025. As per Co-CIOs Chris Marangi and Kevin Dreyer, a resurgence of M&A activity will take place. Industry consolidation is one of the favorite catalysts because it could immediately surface PMV (Private Market Value) either as a target or as a company similarly situated to a target. Notably, increased rates and activist federal agencies depressed M&A activity over the previous 2 years. The new regime in Washington is almost certain to fuel deal activity.
The AI investment returns were largely accrued to companies that are involved in the buildout of computing infrastructure. As a result, investment returns for companies who are creating end user-facing products and services using AI technology have lagged, says John Belton, Co-Portfolio Manager of the Gabelli Growth Innovators ETF (GGRW). This dynamic is expected to reverse over the coming years with GenAI migrating from research labs to user applications and entering a new phase of commercialization. Next, the rise in geopolitical instability continues to drive more NATO members to prioritize defense and military investments, leading to higher defense budgets throughout Europe and the U.S., says Tony Bancroft, Portfolio Manager of the Gabelli Commercial Aerospace and Defense ETF (GCAD).
Tim Winter, Co-Portfolio Manager of the Gabelli Utilities Fund (GABUX), believes that infrastructure improvements can make utilities attractive. Finally, Chris Mancini, who is the Co-Portfolio Manager of the Gabelli Gold Fund (GOLDX), believes that gold continues to offer a good opportunity for investors who are looking for a haven during uncertain times.
Amidst such trends, let us now have a look at the 10 Best Stocks to Buy According to Billionaire Mario Gabelli.
Our Methodology
To make the list of 10 Best Stocks to Buy According to Billionaire Mario Gabelli, we selected the top 10 stocks in GAMCO Investors’ portfolio as of its Q4 2024 13F filing. We settled on the hedge fund’s 10 biggest holdings. Finally, we ranked the stocks in ascending order based on the value of GAMCO Investors, Inc.’s equity stakes. Additionally, we have mentioned the hedge fund sentiment around each stock, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A team of content creators using the latest devices and software to produce high-quality animation and motion pictures.
Sony Group Corporation (NYSE:SONY)
Number of Hedge Fund Holders: 25
GAMCO Investors’ Stake: $133.8 million
Sony Group Corporation (NYSE:SONY) is engaged in designing, developing, producing, and selling electronic equipment, instruments, and devices for the consumer, professional, and industrial markets. Analyst Jim Hin Kwong Au of DBS maintained a “Buy” rating on the company’s stock. The analyst’s rating is backed by factors including Sony Group Corporation (NYSE:SONY)’s impressive revenue and earnings growth, which were mainly aided by non-first-party game software titles and network services.
Furthermore, the company’s management remains confident in the continued expansion of its game business, says the analyst. Sony Group Corporation (NYSE:SONY)’s competitive edge in CMOS technology and strong growth in game and software services can support the growth trajectory moving forward. Elsewhere, Oppenheimer analyst Martin Yang upped Sony Group Corporation (NYSE:SONY)’s price target to $33 from $25, keeping an “Outperform” rating. The firm’s bullish conviction in the company’s outlook stems from the sustained revenue growth, together with accelerating profit margin expansion at PlayStation.
Aristotle Capital Management, LLC, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“Sony Group Corporation (NYSE:SONY), the global provider of videogames and consoles, image sensors, music, and movies, was a top contributor for the period. The company reported strong results driven by third-party gaming revenue and record PlayStation 5 console profitability. This was achieved despite lower console sales, which, in our view, exemplifies the strength of PlayStation’s network effects. PlayStation is the world’s largest gaming platform with 116 million monthly active users, making it an attractive market for game developers and allowing users to play the most advanced games at lower costs than PCs. In its Pictures segment, Crunchyroll (the anime business Sony acquired from AT&T in 2020) signed a distribution agreement with YouTube Primetime Channels, the market share leader in streaming services, which we believe will increase Crunchyroll’s subscriber base. Though a singular example, it illustrates management’s ability to better execute and further improve the segment’s profitability, a catalyst we previously identified. In addition, Sony reported improved sales of image sensors for mobile products as the global smartphone market continued its gradual recovery. Sony’s image sensor business has the largest global market share, and we believe, longer term, it is uniquely positioned to benefit from increasing demand for both autonomous driving technology in vehicles and improved image quality in smartphone cameras. As such, we continue to admire Sony’s capacity to build on its industry leadership and optimize its operations, which includes its plan for a partial spinoff of its Financial Services segment in October 2025.”
Overall, SONY ranks 7th on our list of best stocks to buy according to billionaire Mario Gabelli. While we acknowledge the potential of SONY as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than SONY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.
