The legendary investor Mario Gabelli is one of the first advocates and practitioners of value investing. He founded GAMCO Investors in 1977. Deducing from the fund’s latest 13F filing, the firm’s equity portfolio was valued at about $15.16 billion. Considering that Gabelli is a proponent of value investing, it isn’t surprising that GAMCO had a relatively low turnover ratio of 11.5% for the first quarter. The two largest sectors comprising the fund’s portfolio were consumer discretionary and industrials, with respective representations of 28% and 24%. Let us take a look at the changes Gabelli has made in his top holdings, and whether they reflect his ideas where the stock prices of those companies are headed in the future.
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#5 Genuine Parts Company (NYSE:GPC)
– Shares Owned by GAMCO Investors (as of March 31): 2.13 Million
– Value of Holding (as of March 31): $211.85 Million
During the first quarter GAMCO decreased its Genuine Parts Company (NYSE:GPC) holding by 4%. The stock price has rallied by nearly 11% so far this year. While the company managed to beat bottom line estimates in its first quarter financial results by delivering an EPS of $1.05 against the anticipated $1.03, revenues of $3.72 billion came in-line with the expectations and were 0.5% lower than the same period last year. The core business namely automotive replacement parts registered significant growth to offset declines in the other segments. Winton Capital Management, which is led by David Harding upped its stake in Genuine Parts Company (NYSE:GPC) by 43% during the January-March period to 445,100 shares.
#4 Honeywell International Inc. (NYSE:HON)
– Shares Owned by GAMCO Investors (as of March 31): 1.98 Million
– Value of Holding (as of March 31): $222.02 Million
After a 3% trimming during the first trimester GAMCO’s Honeywell International Inc. (NYSE:HON) stake represented 1.46% of its portfolio. Another fund that also reduced its stake in the company during the same period was Ken Fisher‘s Fisher Asset Management and it held 418,600 shares valued at $47.99 million at the end of March. The $86.5 billion technology and manufacturing company beat analyst estimates in its first quarter financial results by delivering an EPS of $1.53 on top of $9.52 billion revenues, and also announced a new $5 billion share-repurchase program. Moreover, the diversified industrial company also raised the low end of its full-year outlook and EPS is now expected in the $6.55-$6.70 range (vs. $6.45-$6.70), on revenues of $40.3-$40.9 billion. Honeywell International Inc. (NYSE:HON) also recently resolved its dispute concerning Google’s subsidiary Nest Labs, which it claimed infringed on its patents.
#3 Bank of New York Mellon Corp (NYSE:BK)
– Shares Owned by GAMCO Investors (as of March 31): 6.16 Million
– Value of Holding (as of March 31): $226.96 Million
GAMCO has held a stake in Bank of New York Mellon Corp (NYSE:BK) since the first quarter of 2001, and inched it up by 1% in the first quarter of 2016. The $42 billion investment company is conducting due diligence and is also in possible acquisition-related talks with the start-up trading venue DBV-X, which aims to revolutionize the repo market in Europe by allowing market participants to exchange collateral and thereby removing the need for traditional intermediaries like banks. Bank of New York Mellon Corp (NYSE:BK)’s delivered a return on equity of 9.2% in the first quarter as compared to 8.8% during the same period a year ago and 7.1% in the previous quarter. Donald Yacktman‘s Yacktman Asset Management trimmed its holding in the New-York based company by 1% in the first three months to 5.95 million shares.