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Mario Gabelli, Gamco Up Stake in Kaman to 12.4%

Gamco Investors, Kaman Corporation: In an amended 13D filing with the SEC, Mario Gabelli disclosed a 12.4% stake in aerospace equipment company Kaman Corporation (NYSE:KAMN). The 3.3 million-share position is an increase of about 200,000 shares from last month.

Mario Gabelli with cereal box

Generally speaking, Gabelli likes to invest in under appreciated non-tech companies and Kaman fits the bill. The stock presently trades at a mere 14 times forward earnings and a 40% discount to sales value parity. There’s nothing really materially wrong with Kaman, other than the fact that from an investment standpoint, many of its clients like Boeing, for example, garner much more attention.

According to most Wall Street estimates, Kaman’s wing control is expected to help drive it to double-digit earnings growth over the next half-decade–an average of about 15% a year. The company saw its EPS expand by just 6.8% a year over the last five years, so growth is accelerating.

A few other hedge funds that hold positions in Kaman are: Chuck Royce’s Royce & Associates, Joel Greenblatt’s Gotham Asset Management and Glenn Russell Dubin’s Highbridge Capital. The presence of these investor types, along with Gabelli, indicate that value investors might want to take a longer look at the stock.

Disclosure: none

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