Top 5 Small-Cap Stocks Added to Billionaire Mario Gabelli’s Portfolio

3. GARRETT MOTION Pref Shs (NASDAQ:GTXAP)

Value of GAMCO Investors’ 13F Position: $4.61 million

Number of Hedge Fund Shareholders: 28

Several prominent money managers took stakes in GARRETT MOTION Pref Shs (NASDAQ:GTXAP) during Q4, including Gabelli, Howard Marks, Seth Klarman, and Prem Watsa. GAMCO Investors bought 504,220 shares of GTXAP.

GARRETT MOTION Pref Shs (NASDAQ:GTXAP) achieved $3.6 billion in net sales in 2021, a 20% year-over-year increase on a GAAP basis. According to the company, its growth rate outpaced global auto production by 12.5 percentage points, being driven in large part by the company’s aftermarket and commercial vehicle businesses, which grew sales by 21% and 25% respectively last year.

While Garrett Motion has been facing the same supply chain challenges that have beset so many industries, hedge funds appear to be confident about the company’s transition to electric vehicle products and its growing ability to return cash to shareholders.

Here is what Alluvial Capital Management had to say about GARRETT MOTION Pref Shs (NASDAQ:GTXAP) in its Q4 2021 investor letter:

“Garrett Motion is also feeling the effects of the troubles with global supply chains. Difficulties in sourcing semiconductors have led many large automotive manufacturers to slow production, which in turn delays orders for Garrett Motion’s turbochargers. Still, the environment has not prevented Garrett Motion from making progress on improving its balance sheet and beginning to return capital. In November, the company announced a plan to repurchase $100 million in common and preferred stock. Then in December, Garrett Motion announced it would accelerate the planned redemption of its Series B preferred stock held by Honeywell. By this time next year, Garrett Motion will have meaningfully reduced its liabilities and bought in quite a bit of stock at a very attractive price. As supply chains normalize, the company’s earnings and cash flow will benefit, giving the company the ability to return more capital to shareholders and invest in the transition to products for electric vehicles.”