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

1. SPX FLOW, Inc. (NASDAQ:FLOW) 

Value of GAMCO Investors’ 13F Position: $5.40 million

Number of Hedge Fund Shareholders: 31

Topping the list is SPX FLOW, Inc. (NASDAQ:FLOW), which not only got the largest investment from Mario Gabelli among his new small-cap stock picks, but which also has more hedge fund shareholders in our database than any of the other stocks on this list (tied with Bottomline). The hedge funds tracked by Insider Monkey owned over 12% of FLOW’s shares on December 31.

The possibility of a takeover also played a role in SPX FLOW, Inc. (NASDAQ:FLOW)’s recent performance, with shares jumping by 39% since an unsolicited takeover attempt by Ingersoll Rand Inc. (NYSE:IR) last year for $85 per share. While that deal was rejected, the maker of precise measurement tools ended up accepting an only marginally better $86.50 per share offer from Lone Star Funds in December, owing in part to shareholder pressure to consummate a deal.

Here is what Diamond Hill Small Cap Fund had to say about SPX FLOW, Inc. (NASDAQ:FLOW) and the potential sale of the company in its Q3 2021 investor letter:

“On an individual holdings’ basis, top contributors to return included SPX Flow. SPX Flow, a manufacturer of industrial flow control systems such as pumps, valves and mixers, benefited from news it had been approached by Ingersoll Rand about a possible acquisition. SPX rejected the proposal but is reviewing its strategic options, including interest from two other potential buyers. To us, this is a sign the market still undervalues this quality business but other strategic buyers see the value we do. We are confident management will either hold out for a price reflective of long-term intrinsic value or continue to execute as a standalone company, growing intrinsic value at an attractive rate for years to come.”

For more on the latest trades made by some of the biggest hedge fund managers in the world, check out 10 Oil & Gas Stocks to Buy Today According To Rajiv Jain’s GQG Partners and 10 Stocks to Buy According to Canyon Capital Advisors.

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