Billionaire Gabelli Says Sony Corp (SNE) Should Split, Calls Herc Holdings Inc (HRI) “A Triple”, Talks Favorite Defensive Stocks

Gabelli is also bullish on Textron Inc. (NYSE:TXT), which is trading near $39 per share. Textron Inc (NYSE:TXT) is strong in the commercial aviation segment of the market, as the company recently agreed to pay $1.4 billion to acquire plane maker Beechcraft Corp. He thinks that Textron Inc (NYSE:TXT) can also do well in the fighter trainer market. By June’s end, 27 hedge funds in our database held Textron shares worth $442 million.

As Gabelli thinks that the defense ecosystem will do well, it’s unsurprising that he’s also bullish on another industry play. In this case, he also likes Aerojet Rocketdyne Holdings Inc (NYSE:AJRD), which is a manufacturer of defense and aerospace products. He thinks that a new contract for propulsion systems bodes well for Aerojet Rocketdyne Holdings Inc (NYSE:AJRD). About 26% of Aerojet’s shares, worth $306 million, were held by 16 hedge funds in our system on June 30.

Gabelli also gave his views on the infrastructure sector and his favorite picks in it. He thinks that infrastructure spending will increase in places like Europe, Japan and the U.S. He is particularly bullish on infrastructure spending in the U.S because more than 35% of the bridges in the country need repairs and upgrades. He likes United Rentals Inc (NYSE:URI) and Herc Holdings Inc (NYSE:HRI), which supply equipment to the infrastructure industry on a rental basis. Herc Holdings is a spin-off from Hertz rental cars and has been trading for about four months. He thinks that the margins for Herc Holdings will go up in the future and that the stock has the potential to triple.

Asked about his views on the impending merger of TimeWarner Inc (NYSE:TWX) and AT&T Inc. (NYSE:T), Gabelli said that he thinks that the merger could work. He thinks that size and scale is important in becoming a global business on a planet with around 7 billion people. He thinks that TimeWarner Inc (NYSE:TWX) which is trading at around $87.50, could earn more than $7 per share in the next 3-4 years. He thinks that the merger has a 50% probability of being approved by regulators. 

Disclosure: None