Billionaire Mario Gabelli Counts Navistar International Corp (NAV), GATX Corporation (GMT) Among Top Small-Cap Picks

Gabelli also decreased his stake in railway equipment company GATX Corporation (NYSE:GMT), his second-most valuable small-cap position, by 2% to 3.41 million shares valued at $197.80 million. Chicago-based GATX, which is operating in a fairly cyclical industry, has dipped by 1% and 14% over the past five and 12 months respectively. The company is currently bracing for the impact that new regulations related to the retirement of tank cars for flammable liquids, which may affect 13,700 or around 11% of the company’s tank fleet, will have on its finances. GATX’s earnings results for the first quarter did beat analysts’ expectations with earnings of $1.39 compared to expectations of just $1.08. Maybe the most attractive characteristic of GATX however is its ability to pay good and continuous dividends. Since 2011 its dividend payments have been continuously raised, most recently by another  15.2% in February. Other hedge funds with positions in GATX Corporation (NYSE:GMT) include Skylands Capital, managed by Charles Paquelet, which increased its stake to 374,450 shares and Citadel Investment group, which boosted its stake by 629% to 398,751 shares.

Finally, GAMCO increased its stake in automotive company Navistar International Corp (NYSE:NAV) by 7% to 6.52 million shares valued at $192.3 million. Chicago-based Navistar, founded in 1902, has been having a tough year, dropping by 21.2% year-to-date. Even though the company’s revenue has increased, concerns regarding the South American market and Environmental Protection Agency (EPA) regulations are affecting the share price negatively. The increased revenue didn’t met the analysts’ expectations but the loss per share for the company’s fiscal first quarter of 2015 ending on January 31, was better than expected at $1.10. Analysts are indeed dubious regarding Navistar International Corp (NYSE:NAV), with Morningstar giving it a B- credit rating last month, implying a high probability of default. Notably, activist Carl Icahn‘s Icahn Capital has a large stake of 16.27 million shares in Navistar valued at $480.04 million and has been active in the past regarding the company’s governance.

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