Mario Gabelli Stock Portfolio: 10 Top Stock Picks

Published on November 18, 2023 at 12:43 pm by Usman Kabir in Hedge Funds, News

In this article, we discuss the 10 top stock picks of Mario Gabelli. If you want to skip our detailed analysis of these stocks, go directly to Mario Gabelli’s Top 5 Stock Picks.

The stock market in the United States is full of investors looking to make a lot of money in a short space of time. This is primarily the main reason behind the incredible rise of growth stocks like Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG), at the expense of more value-oriented entities. One person on Wall Street who still refuses to buy the growth mantra is Mario Gabelli, the billionaire chief of GAMCO Investors, a hedge fund with an equity portfolio worth over $8 billion.

Gabelli has had a career in the stock market that has spanned over five decades, starting back in 1977. Over the course of this time, he has stuck to the basics, investing in firms that are undervalued based on their fundamentals, and making a tidy profit by buying and selling their shares at the right time. Gabelli is old-school in that he likes to hold on to his stakes in these value entities over long periods, only shedding or loading up in miniscule amounts. This strategy has generated a quarter-on-quarter return of over 4% for his fund in the past two years.

His latest dealings in equities paint an interesting picture. Per latest 13F data, at the end of September 2023, the top ten holdings of his equity portfolio comprised around 15% of the portfolio. He has, on average, held on to his top ten holdings for more than nine quarters. These holdings are mostly in the industrial and consumer goods sectors. Between June and September, GAMCO Investors reduced holdings in 398 stocks, made new purchases in 41, sold out of 51, and made additional purchases in 205 stocks.

In a recent interview with PI Online, Gabelli outlined how technology, stock trading applications, and the advent of artificial intelligence have changed value investing, Per the veteran investor, even though the new tech was evolving the field of stock trading, it was still paramount that human beings and investors, with their experience and fact-checking instincts, be central to the whole process. Gabelli noted that he did not give too much credence to macro conditions when investing in a firm, firmly focusing on value for price instead.

“We think top-down all the time, but we don’t invest that way. OK, will there be a recession? Will the Fed go to stay higher longer? Is inflation going to happen? What we want to understand is, is it a good company, with a good business, good management, and a reasonable price? So price is important to me. It’s very hard for me to see a company with $800 billion market cap. How much can it grow over the next five years? I have been through these cycles. You basically have to take a practical dynamic. What is a business worth? And that’s what we try to do.”

Our Methodology

These were picked from the investment portfolio of GAMCO Investors at the end of the third quarter of 2023. In order to provide readers with some context for their investment choices, the analyst ratings for the stocks are also mentioned. The hedge fund sentiment around each stock was calculated using the data of around 900 hedge funds tracked by Insider Monkey in the second quarter of 2023.

Top Stock Picks of Mario Gabelli

10. The Bank of New York Mellon Corporation (NYSE:BK)

Number of Hedge Fund Holders: 52

The Bank of New York Mellon Corporation (NYSE:BK) provides financial products and services. According to latest 13F data, as of the end of September 2023, the fund holds a stake in the firm worth more than $77 million, consisting of over 1.8 million shares.

On October 18, investment advisory Argus maintained a Buy rating on The Bank of New York Mellon Corporation (NYSE:BK) stock and lowered the price target to $60 from $63, noting that headwinds have continued for the fee revenue growth of the firm.

At the end of the second quarter of 2023, 52 hedge funds in the database of Insider Monkey held stakes worth $1.4 billion in The Bank of New York Mellon Corporation (NYSE:BK), compared to 46 the preceding quarter worth $1.6 billion.

Just like Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG), The Bank of New York Mellon Corporation (NYSE:BK) is one of the top stocks in the portfolio of Mario Gabelli.

9. Watts Water Technologies, Inc. (NYSE:WTS)

Number of Hedge Fund Holders: 20

Watts Water Technologies, Inc. (NYSE:WTS) makes and sells systems that manage and control the flow of fluids and energy. Latest filings, as of the end of September this year, show that GAMCO Investors is long on more than 538,000 shares in the firm worth $93 million, representing 1.07% of the portfolio.

In mid-September, investment advisory TD Cowen maintained a Market Perform rating on Watts Water Technologies, Inc. (NYSE:WTS) stock and raised the price target to $165 from $160.

At the end of the second quarter of 2023, 20 hedge funds in the database of Insider Monkey held stakes worth $526 million in Watts Water Technologies, Inc. (NYSE:WTS), compared to 21 the preceding quarter worth $499 million.

8. American Express Company (NYSE:AXP)

Number of Hedge Fund Holders: 73

American Express Company (NYSE:AXP) provides payments and travel-related services. Latest filings show that GAMCO Investors is long on more than 653,000 shares in the firm worth $97 million, representing 1.12% of the portfolio, as of the end of September 2023.

On November 15, investment advisory Bank of America maintained a Buy rating on American Express Company (NYSE:AXP) stock and lowered the price target to $198 from $200, noting that October operating metrics displayed higher net-write off rates but resilient loan growth.

Among the hedge funds being tracked by Insider Monkey, Texas-based firm Fisher Asset Management is a leading shareholder in American Express Company (NYSE:AXP) with 10.4 million shares worth more than $1.5 billion.

In its Q3 2023 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and American Express Company (NYSE:AXP) was one of them. Here is what the fund said:

“Other detractors included American Express Company (NYSE:AXP), which fell on concerns over slower consumer spending and rising charge-offs, as well as wireless tower REIT American Tower, which was pressured by the increase in rates along with the broader real estate sector.”

7. CNH Industrial N.V. (NYSE:CNHI)

Number of Hedge Fund Holders: 30

CNH Industrial N.V. (NYSE:CNHI) markets agricultural and farm machinery. In the filings for the third quarter of 2023, the fund detailed that it owned 8.7 million shares of the company worth $106 million, representing 1.23% of the portfolio.

On October 18, investment advisory Barclays maintained an Overweight rating on CNH Industrial N.V. (NYSE:CNHI) stock and lowered the price target to $16 from $17, noting that lower earnings could bring higher multiples for machinery stocks at present valuations.

Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Harris Associates is a leading shareholder in CNH Industrial N.V. (NYSE:CNHI) with 123 million shares worth more than $1.5 billion.

In its Q3 2023 investor letter, Oakmark Funds, an asset management firm, highlighted a few stocks and CNH Industrial N.V. (NYSE:CNHI) was one of them. Here is what the fund said:

“CNH Industrial N.V. (NYSE:CNHI) (Italy), which designs, manufactures, and distributes agricultural and construction equipment, was the top detractor for the quarter. 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 recently met with CEO Scott Wine at the company’s offices. He expressed confidence in the company’s ability to drive much better through-cycle financial performance while avoiding the company’s previous mistakes. He also believes the company’s share price is materially undervalued, and although he would prefer to invest in the business, he sees an opportunity to increase returns to shareholders via share repurchases. We believe CNH Industrial remains a solid business in an attractive industry that is run by a much-improved management team.”

6. Modine Manufacturing Company (NYSE:MOD)

Number of Hedge Fund Holders: 21

Modine Manufacturing Company (NYSE:MOD) is a Wisconsin-based thermal management company founded in 1916. The fund managed by Gabelli, at the end of September 2023, owns more than 2.5 million shares in the thermal management company worth over $115 million, representing close to 1.33% of their portfolio.

On November 3, investment advisory B Riley maintained a Buy rating on Modine Manufacturing Company (NYSE:MOD) stock and raised the price target to $60 from $55, appreciating the second quarter earnings report of the firm.

At the end of the second quarter of 2023, 21 hedge funds in the database of Insider Monkey held stakes worth $203 million in Modine Manufacturing Company (NYSE:MOD), compared to 22 in the previous quarter worth $164 million.

Along with Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG), Modine Manufacturing Company (NYSE:MOD) is one of the top stocks in the portfolio of Mario Gabelli.

Click to continue reading and see Mario Gabelli Stock Portfolio: 5 Top Stock Picks.

AI Fire Sale: Insider Monkey’s #1 AI Stock Pick Is On A Steep Discount

Published on October 30, 2024 at by Inan Dogan, PhD

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A New Dawn is Coming to U.S. Stocks

Published on November 16, 2024 at by Insider Monkey Staff

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

Here to answer that for us… and give away his No. 1 free AI recommendation… is 50-year Wall Street titan, Marc Chaikin.

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He’s used this system to survive nine bear markets… create three new indices for the Nasdaq… and even predict the brutal bear market of 2022, 90 days in advance.

Click to continue reading…

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