Navistar International Corp (NAV), Hillshire Brands Co (HSH): Billionaire Mario Gabelli’s Takeover Targets

Page 1 of 2

Billionaire Mario Gabelli of GAMCO Investors appeared on CNBC on July 9th to discuss a variety of topics, including three stocks which he thought might be potential takeover targets. Acquisitions of public companies occur at significant premia to the market price, allowing investors to earn high profits if they guess right, but we don’t like relying entirely on this kind of speculation and would advise to see that the company is a decent value in its own right before buying.

A trucking takeover

Mario GabelliThe billionaire listed Navistar International Corp (NYSE:NAV) as one of his stocks to watch. We track quarterly 13F filings from hedge funds and other notable investors such as GAMCO as part of our work developing investment strategies (for example, we have found that the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year) and can see that GAMCO owned 4.6 million shares of Navistar International Corp (NYSE:NAV) as of the end of March; find Gabelli’s favorite stocks.

Navistar International Corp (NYSE:NAV) has been struggling the past few years as its new truck engine did not meet government standards, which drove the stock price down about 50% in the last two years and has analysts calling for losses of $7.63 per share for the current fiscal year. Billionaire activist Carl Icahn has been another major shareholder of Navistar International Corp (NYSE:NAV)—check out more stocks Icahn owns—and had previously tried to merge the company with peer Oshkosh.

Packaged meats

Hillshire Brands Co (NYSE:HSH), a primarily packaged meats company, was another of Gabelli’s potential takeover targets. Hillshire Brands Co (NYSE:HSH)’s revenue was about flat in its most recent quarterly report compared to the same period in the previous fiscal year, yet the stock is still valued at 19 times forward earnings estimates. Part of the reason for this premium pricing is that M&A activity in food companies has been heating up, and the market is anticipating a potential deal. In fact, Hillshire Brands Co (NYSE:HSH)’s own closest peer Smithfield Foods, Inc. (NYSE:SFD) has received an offer from Chinese pork producer Shuanghui.

While the deal might not close, as a number of U.S. constituencies object to the possibility that the U.S. food supply could become exposed to Chinese pork (Shuanghui has stated that, in fact, pork would be exported to China from the U.S.). In addition, activist fund Starboard Value has taken a nearly 6% stake in the company and has been urging the company to break up and potentially sell some divisions. At its current price Smithfield Foods, Inc. (NYSE:SFD) is valued at 11 times consensus earnings for the forward fiscal year.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Biggest Airports in the World

The 5 Most Gang Infested Cities In America

The 34 Smartest Countries in the World

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!