Top 10 Aerospace Stocks To Buy According To Billionaire Mario Gabelli’s GAMCO Investors

Published on September 20, 2022 at 9:16 am by Omer Farooq in Hedge Funds, News

In this article, we will look at the top 10 aerospace stock picks of Mario Gabelli’s GAMCO Investors. If you want to skip reading about Mario Gabelli’s hedge fund performance and why he is bullish on the aerospace sector, you can go directly to Top 5 Aerospace Stocks To Buy According To Billionaire Mario Gabelli’s GAMCO Investors.

Mario Gabelli is an Italian-American financier and financial analyst. Mr. Gabelli has had a self-driven passion for finance and has been involved with stocks since the age of 13. He founded his hedge fund, GAMCO Investors, back in 1976 and has since made a fortune for himself and his investors. As of 2022, Forbes estimates Mr. Gabelli’s net worth to be around $1.7 billion.

2022 has been a bad year for the markets. With the Russian invasion of Ukraine, supply chain disruptions, and consequently global inflation, investors like Mario Gabelli have been receiving wide coverage for their analysis of the markets and what sectors should investors be closely watching moving ahead. One such sector that billionaire Mario Gabelli has been closely following in 2022 is aerospace. Mr. Gabelli recently appeared on CNBC’s Squawk Box, where he discussed the long-term growth opportunity in the aerospace and defense industry and talked about some companies he likes in the space. One particular aerospace company that Mario Gabelli is most bullish on is Aerojet (NYSE:AJRD). Mr. Gabelli disclosed that his hedge fund recently bought an additional 0.80 million shares of the company and that he sees significant upside for the stock due to the company’s “capabilities in hypersonics”.

Mario Gabelli’s Stock Portfolio and Hedge Fund Performance

In the second quarter of 2022, Mario Gabelli’s hedge fund exited 55 companies, reduced its stakes in 427 companies, initiated a position in 39 companies, and increased its position in 206 companies. GAMCO Investors has posted some strong returns over the past eight quarters. From the second quarter of 2020 till the second quarter of 2022, the fund reported negative quarter-on-quarter returns for only 2 quarters. GAMCO Investors has averaged a quarter-on-quarter return of 6.5% over the past eight quarters. The fund posted quarter-on-quarter gains of 4.26% in the second quarter of 2022.

In addition to Aerojet (NYSE:AJRD), Mario Gabelli’s hedge fund has hefty stakes in aerospace companies such as Honeywell International Inc. (NYSE:HON), Curtiss-Wright Corporation (NYSE:CW), and Textron Inc. (NYSE:TXT). We have discussed these aerospace stocks among others in the article below.

Mario Gabelli of GAMCO Investors

Our Methodology

To determine the top 10 aerospace stocks to buy according to GAMCO Investors, we reviewed the fund’s second-quarter 2022 13F filings. We searched for aerospace companies among the fund’s holdings and narrowed down our selection to stocks that ranked among the fund’s top holdings. We have arranged these stocks in increasing order of GAMCO Investors’ stakes in them.

Top 10 Aerospace Stocks To Buy According To GAMCO Investors

10. Moog Inc. (NYSE:MOG)

GAMCO Investors’ Stake Value: $11,759,000

Percentage of GAMCO Investors’ 13F Portfolio: 0.12%

Number of Hedge Fund Holders: 20

Moog Inc. (NYSE:MOG) designs and manufactures precision motion & fluid controls, and control systems for applications in aerospace, defense, and industrial markets. As of June 30, GAMCO Investors’ stake in Moog Inc. (NYSE:MOG) is valued at $11.75 million, which covers 0.12% of the fund’s 13F portfolio.

On July 19, Moog Inc. (NYSE:MOG) announced that it has entered into a four-year agreement with Triumph Group (NYSE:TGI), to provide maintenance and upkeep services for Boeing 787 landing gear and cargo door actuation control systems.

On July 29, Moog Inc. (NYSE:MOG) announced earnings for the fiscal third quarter of 2022. The company reported earnings per share of $1.61 and beat estimates by $0.20. The company generated a revenue of $772.9 million, up 9.27% year over year, and beat Wall Street expectations by $10.6 million.

Moog Inc. (NYSE:MOG) is undervalued and also offering dividends. As of September 19, the stock is trading at a PE multiple of 15x and is offering a forward dividend yield of 1.40%, which the company supports with free cash flows of $100 million.

At the close of Q2 2022, 20 hedge funds were eager on Moog Inc. (NYSE:MOG) and held stakes worth $113.40 million in the company.

Like Aerojet (NYSE:AJRD), Honeywell International Inc. (NYSE:HON), Curtiss-Wright Corporation (NYSE:CW), and Textron Inc. (NYSE:TXT), Mario Gabelli is bullish on Moog Inc. (NYSE:MOG) and sees the company benefitting from long-term growth in defense spending.

9. AAR Corp. (NYSE:AIR)

GAMCO Investors’ Stake Value: $12,517,000

Percentage of GAMCO Investors’ 13F Portfolio: 0.13%

Number of Hedge Fund Holders: 19

AAR Corp. (NYSE:AIR) provides aviation products and services to commercial aviation, government, and defense markets worldwide. On August 3, AAR Corp. (NYSE:AIR) announced that it has secured a $173.5 million order from the U.S. Air Force to produce Next Generation All Aluminum Cargo Pallets.

On July 21, AAR Corp. (NYSE:AIR) released earnings for the fourth quarter of fiscal 2022. The company reported earnings per share of $0.72 and outperformed expectations by $0.05. The company generated a revenue of $476 million, up 8.8% year over year, and beat estimates by $14.2 million. As of September 19, the stock has gained 20.35% over the past twelve months.

This July, Truist analyst Michael Ciarmoli revised his price target on AAR Corp. (NYSE:AIR) to $54 from $58 and reiterated a Buy rating on the shares.

At the end of Q2 2022, 19 hedge funds held stakes in AAR Corp. (NYSE:AIR). The total value of these stakes amounted to $174.6 million. Of these, $12.5 million were of GAMCO Investors.

8. Ducommun Incorporated (NYSE:DCO)

GAMCO Investors’ Stake Value: $15,569,000

Percentage of GAMCO Investors’ 13F Portfolio: 0.17%

Number of Hedge Fund Holders: 11

Ducommun Incorporated (NYSE:DCO) designs and manufactures complex electronic systems for mission-critical applications and primarily serves the aerospace and defense sector. The company has two divisions: Electronic Systems and Structural Systems. On July 19, Truist analyst Michael Ciarmoli adjusted his price target on Ducommun Incorporated (NYSE:DCO) to $63 from $72 and maintained a Buy rating on the shares.

On August 4, Ducommun Incorporated (NYSE:DCO) released earnings for the second quarter of fiscal 2022. The company reported earnings per share of $0.34 and generated a revenue of $174.2 million, up 8.74% year over year, and ahead of Wall Street consensus by $3.3 million.

On September 7, Ducommun Incorporated (NYSE:DCO) announced that its performance center, based in Appleton, Wisconsin, is expected to generate revenue of $100 million in 2022. The company recently secured multiple long-term contracts from Raytheon Technologies Corporation (NYSE:RTX).

At the close of Q2 2022, 11 hedge funds held stakes in Ducommun Incorporated (NYSE:DCO). The collective stakes of these hedge funds amounted to $604 million. As of June 30, GAMCO Investors’ stake in Ducommun Incorporated (NYSE:DCO) is valued at $15.5 million. The investment covers 0.17% of Mario Gabelli’s 13F portfolio.

7. HEICO Corporation (NYSE:HEI)

GAMCO Investors’ Stake Value: $16,281,000

Percentage of GAMCO Investors’ 13F Portfolio: 0.17%

Number of Hedge Fund Holders: 39

HEICO Corporation (NYSE:HEI) is a leading global manufacturer of products for the aerospace, defense, and electronics markets. At the end of Q2 2022, 39 hedge funds were long HEICO Corporation (NYSE:HEI) and held stakes worth $601 million in the company. Of those, $16.28 million were of GAMCO Investors.

HEICO Corporation (NYSE:HEI) is conducting strategic M&A this year. On August 9, HEICO Corporation (NYSE:HEI) announced that it has wholly acquired Charter Engineering Inc., a leading manufacturer of relay switches. On August 11, HEICO Corporation (NYSE:HEI) announced the acquisition of Sensor Systems, an ISO-certified manufacturer and supplier of precision electromechanical components. On September 1, HEICO Corporation (NYSE:HEI) announced that it has acquired 80% of Ironwood Electronics, an ISO-certified manufacturer of performance adapters and sockets.

Wall Street sees upside to HEICO Corporation (NYSE:HEI). On August 16, Baird analyst Peter Arment raised his price target on HEICO Corporation (NYSE:HEI) to $186 from $160 and reiterated a buy-side Outperform rating on the shares. On September 19, Jefferies analyst Sheila Kahyaoglu reiterated her $180 price target on HEICO Corporation (NYSE:HEI) and upgraded the stock to Buy from Hold.

On August 29, HEICO Corporation (NYSE:HEI) reported earnings for the third quarter of fiscal 2022. The company reported earnings per share of $0.60 and generated a revenue of $569.5 million, up 20.74% year over year, and beat Wall Street expectations by $14 million. As of September 19, HEICO Corporation (NYSE:HEI) has returned 16.48% to investors over the past twelve months.

6. L3Harris Technologies, Inc. (NASDAQ:LHX)

GAMCO Investors’ Stake Value: $22,245,000

Percentage of GAMCO Investors’ 13F Portfolio: 0.24%

Number of Hedge Fund Holders: 34

L3Harris Technologies, Inc. (NASDAQ:LHX) is a leading global aerospace and defense company that provides mission-critical solutions for government and commercial customers. On August 29, RBC Capital analyst Ken Herbert initiated coverage of L3Harris Technologies, Inc. (NASDAQ:LHX) with a buy-side Outperform rating and a $285 price target.

On August 2, L3Harris Technologies, Inc. (NASDAQ:LHX) announced a strategic collaboration with Vuzix (NASDAQ:VUZI) to build a waveguide-based optics engine for use in head-borne systems in military applications. On September 16, The U.S. Air Force’s Rapid Capabilities Office tasked L3Harris Technologies, Inc. (NASDAQ:LHX) to develop and deploy the digital infrastructure for advanced battle management and command-and-control capabilities for the Air Force and Space Force.

On July 28, L3Harris Technologies, Inc. (NASDAQ:LHX) released earnings for the second quarter of fiscal 2022. The company generated a revenue of $4.14 billion and reported earnings per share of $3.23, beating expectations by $0.05. As of September 19, L3Harris Technologies, Inc. (NASDAQ:LHX) has gained 8.72% year to date.

At the close of Q2 2022, 34 hedge funds were bullish on L3Harris Technologies, Inc. (NASDAQ:LHX) and held stakes worth $791.5 million in the company. This is compared to 40 positions in the previous quarter with stakes worth $703 million.

As of June 30, GAMCO Investors’ stakes in L3Harris Technologies, Inc. (NASDAQ:LHX) are valued at $22.2 million. The investment covers 0.24% of Mario Gabelli’s 13F portfolio.

In addition to L3Harris Technologies, Inc. (NASDAQ:LHX), some of the top aerospace stocks to buy according to Mario Gabelli’s GAMCO Investors include Honeywell International Inc. (NYSE:HON), Curtiss-Wright Corporation (NYSE:CW), and Textron Inc. (NYSE:TXT).

Click to continue reading and see Top 5 Aerospace Stocks To Buy According To Billionaire Mario Gabelli’s GAMCO Investors.

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

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Published on May 2, 2024 at by Insider Monkey Staff

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