10 Best Value Stocks to Buy in 2023 According to Billionaire Mario Gabelli

Published May 24, 2023 at 9:40 am EDT Updated August 19, 2026 at 9:50 am EDT

In this article, we discuss 10 best value stocks to buy in 2023 according to billionaire Mario Gabelli.

During his appearance on CNBC’s ‘Squawk Box’ on May 5, Mario Gabelli, the billionaire CEO of GAMCO Investors, acknowledged that he identifies himself as a long-term value investor. Rather than solely considering company fundamentals, he emphasizes a broader perspective. Gabelli praised Warren Buffett’s strategy in the financial sector, noting that Buffett tends to prefer investing in insurance companies over banks due to the volatility and risk associated with bank failures and subsequent financial losses. He also strongly criticized the mishandling that resulted in the collapses of Silicon Valley Bank, Signature Bank, and First Republic Bank. On the other hand, Mario Gabelli noted that the long-term health of businesses seems healthy based on cash flow, reduced double ordering, and inventories coming down. However, in the short-term, these companies are facing staggering interest rates on borrowing.

Mario Gabelli, in an interview with Markets Insider on April 4, warned that American investors could potentially encounter a recession in the near future. He also expressed concerns about potential stock market declines, a decrease in house prices, and the lingering effects of the banking crisis. The billionaire told Markets Insider:

“I see an economic slowdown in the second half of 2023, probably a recession.”

Nonetheless, Gabelli forecasted that the downturn wouldn’t be overly severe due to anticipated federal infrastructure initiatives and increased government spending in preparation for the upcoming presidential election. These measures are expected to boost demand. Additionally, Gabelli pointed out that companies relocating their operations back to the country and the recovery of countries like China could help mitigate the effects of the economic slowdown. He further said:

“The Fed is unlikely to bend at the moment. They’ll stay the course and raise rates.”

As per Markets Insider, Gabelli emphasized the potential danger of a credit crunch that could arise if customers continue to transfer their deposits from smaller banks to larger ones or money-market funds. He also highlighted the possibility of lenders becoming more cautious and scaling back their lending activities due to concerns about potential bank runs. Gabelli noted that tighter financing conditions could have a significant impact on the housing and commercial real estate sectors, as both heavily rely on loans for their operations.

In this article, we discuss the 10 newest value stocks that billionaire Mario Gabelli added to his Q1 2023 portfolio. Among these additions are Philip Morris International Inc. (NYSE:PM), Univar Solutions Inc. (NYSE:UNVR), and Garrett Motion Inc. (NASDAQ:GTX).

Our Methodology

This list comprises value stocks that Mario Gabelli’s GAMCO Investors added to its portfolio during the first quarter of 2023. The selection criteria focused on stocks with price-to-earnings (P/E) ratios below 20 as of May 23. The list is ranked in ascending order based on the percentage of stake held by GAMCO. We have also mentioned the hedge fund sentiment around the securities as of Q1 2023.

Mario Gabelli of GAMCO Investors

Best Value Stocks to Buy in 2023 According to Billionaire Mario Gabelli

10. Caterpillar Inc. (NYSE:CAT)

Stake Value of GAMCO Investors: $310,765

Number of Hedge Fund Holders: 52

Caterpillar Inc. (NYSE:CAT) designs, manufactures, and sells machinery, engines, and related products used in construction, mining, forestry, energy, transportation, and other industries. The company is known for its iconic yellow construction equipment, including bulldozers, excavators, loaders, and motor graders. In the first quarter of 2023, Gabelli added Caterpillar Inc. to his portfolio by acquiring 1,358 shares worth $310,765. It is one of the best value stocks in GAMCO Investors’ portfolio.

In light of the recent earnings season for the industrial machinery sector, analyst David Raso from Evercore ISI maintained an Outperform rating on Caterpillar Inc. on May 9. However, he adjusted the firm’s price target for the company’s shares to $263 from $288. After assessing the first quarter results, the firm increased its earnings per share (EPS) estimates for fiscal year 2023 by an average of 5%-7%. However, they trimmed the estimates for fiscal year 2024 by approximately 2%-3%. Evercore noted that while strong reports were initially well-received, concerns about macroeconomic factors led to expectations of EPS reductions in late 2023 and 2024, potentially resulting in a decline in earnings for those years.

According to Insider Monkey’s first quarter database, 52 hedge funds were bullish on Caterpillar Inc., compared to 50 funds in the prior quarter. Bill & Melinda Gates Foundation Trust is the largest stakeholder of the company.

In addition to Philip Morris International Inc., Univar Solutions Inc., and Garrett Motion Inc., Caterpillar Inc. is one of the best value stocks to buy in 2023 according to Mario Gabelli.

Diamond Hill Large Cap Strategy made the following comment about Caterpillar Inc. in its Q4 2022 investor letter:

“In the case of Caterpillar Inc., the company reported a better-than-expected Q3 as demand in mining, non-residential construction and energy remained healthy through the year even as recession fears grew. Caterpillar showed strong pricing power and operating efficiency in the face of supply chain constraints and labor shortages, which in turn contributed to better-than-expected share price performance.”

9. Titan International, Inc. (NYSE:TWI)

Stake Value of GAMCO Investors: $524,000

Number of Hedge Fund Holders: 20

Titan International, Inc. (NYSE:TWI) engages in the production and distribution of wheels, tires, undercarriage systems, and related components for off-highway vehicles. The company operates within three main segments – Agricultural, Earthmoving/Construction, and Consumer. In Q1 2023, Mario Gabelli’s GAMCO Investors added Titan International, Inc. to its portfolio by picking up 50,000 shares worth $524,000. It is one of the best value stocks according to Gabelli.

On May 3, Titan International, Inc. reported a Q1 non-GAAP EPS of $0.53, beating Wall Street estimates by $0.04. However, the revenue of $549 million missed market consensus by $10.52 million. At the close of the first quarter of 2023, the company’s cash and cash equivalents amounted to $164.1 million, as opposed to $159.6 million on December 31, 2022.

According to Insider Monkey’s first quarter database, 20 hedge funds were bullish on Titan International, Inc., and Mark Rachesky’s MHR Fund Management held the largest stake in the company, comprising 8 million shares worth approximately $84 million.

8. Toll Brothers, Inc. (NYSE:TOL)

Stake Value of GAMCO Investors: $642,321

Number of Hedge Fund Holders: 37

Toll Brothers, Inc. (NYSE:TOL) is engaged in the design, construction, promotion, sale, and financing of different types of high-end detached and attached homes within upscale residential neighborhoods across the United States. In Q1 2023, Toll Brothers, Inc. was a new arrival in Mario Gabelli’s 13F portfolio, with the billionaire purchasing 10,700 shares of the company worth $642,321.

After Toll Brothers, Inc. reported fiscal Q1 earnings per share that surpassed both the firm’s and consensus estimates, BofA analyst Rafe Jadrosich increased the firm’s price target on the shares from $68 to $70. Jadrosich maintained a Buy rating on Toll Brothers, Inc. on February 23, citing better-than-expected orders and a significant improvement in demand year-to-date. Although the firm acknowledged that short-term trends could be influenced by fluctuations in mortgage rates, it expressed increased confidence that Toll Brothers, Inc. will likely continue to expand its book value and sustain a return-on-equity that surpasses its cost of capital.

According to Insider Monkey’s first quarter database, 37 hedge funds were long Toll Brothers, Inc., with collective stakes worth $882.2 million. Edgar Wachenheim’s Greenhaven Associates held the largest position in the company, comprising 5.3 million shares worth $321 million.

Baron Funds made the following comment about Toll Brothers, Inc. in its Q4 2022 investor letter:

“Toll Brothers, Inc. is the leading luxury homebuilder in the U.S. with a capable management team as well as a large and valuable owned land portfolio. Toll Brothers is more insulated than its peers from elevated mortgage rates because 20% of the buyers of Toll homes pay 100% in cash.

At its year-end 2022 price of only $49.92/share, the company is valued at only 0.83 times our estimate of 2023 tangible book value of $60/share. Historically, Toll Brothers’ shares have been valued, on average, at 1.4 times book value and a peak multiple of approximately 2.0 times tangible book value. If the shares recover in the next few years and trade only to the company’s long-term average multiple of 1.4 times book value, Toll Brothers’ share price would increase 82% to $91 per share.”

7. Beacon Roofing Supply, Inc. (NASDAQ:BECN)

Stake Value of GAMCO Investors: $654,942

Number of Hedge Fund Holders: 19

Beacon Roofing Supply, Inc. (NASDAQ:BECN) is involved in the distribution of roofing materials for residential and non-residential purposes, as well as other building products that complement roofing, to contractors, home builders, building owners, lumberyards, and retailers in the United States and Canada. Beacon Roofing Supply, Inc. is a new addition in Mario Gabelli’s Q1 2023 portfolio, with the billionaire buying 11,129 shares worth $654,942.

On May 5, Deutsche Bank analyst Joe Ahlersmeyer raised the firm’s price target on Beacon Roofing Supply, Inc. to $86 from $85 and reiterated a Buy rating on the shares following the Q1 results.

According to Insider Monkey’s first quarter database, 19 hedge funds were bullish on Beacon Roofing Supply, Inc., compared to 24 funds in the earlier quarter. David Cohen and Harold Levy’s Iridian Asset Management is the biggest position holder in the company, with 438,549 shares worth $25.80 million.

Here is what Fiduciary Management has to say about Beacon Roofing Supply, Inc. in its Q3 2021 investor letter:

“Beacon is the largest publicly traded (#2 overall) distributor of roofing materials and complementary building products in the U.S. and Canada. Beacon serves more than 90,000 customers and offers 140,000 SKUs from over 400 branches throughout all 50 states (97% of sales) and 6 Canadian provinces (3% of sales). Beacon makes 1.7 million annual deliveries (within a two-hour radius) using its fleet of specialized trucks. Since the sale of the non-core Interiors division (2021), their run-rate sales have been 53% Residential Roofing; 25% Commercial Roofing; and 22% Complementary Building Products (siding, windows, specialty exterior building products, insulation, and waterproofing systems). (Click here to continue reading)

6. GE HealthCare Technologies Inc. (NASDAQ:GEHC)

Stake Value of GAMCO Investors: $660,424

Number of Hedge Fund Holders: 37

GE HealthCare Technologies Inc. (NASDAQ:GEHC) is involved in the advancement, production, and promotion of different products, services, and digital solutions that support the diagnosis, treatment, and monitoring of patients. It operates through four segments – Imaging, Ultrasound, Patient Care Solutions, and Pharmaceutical Diagnostics. GE HealthCare Technologies Inc. is one of the best value stocks to buy according to Mario Gabelli. The billionaire acquired a position worth $660,424 in the company during the first quarter of 2023.

On May 15, Oppenheimer analyst Suraj Kalia initiated coverage of GE HealthCare Technologies Inc. with an Outperform rating and a $97 price target. The analyst described GE HealthCare Technologies Inc. as a global leader in healthcare diagnostics, imaging, and intervention, emphasizing its extensive range of products in areas such as X-rays, CT scans, MRI scans, ultrasound, services, and digital solutions. The analyst believes that GE HealthCare Technologies Inc.’s forward price-to-earnings (P/E) multiple of 22 times is lower than the average applied to large-cap medical technology companies, but considers this valuation appropriate given the current stage of GE Healthcare’s development as an independent entity.

According to Insider Monkey’s first quarter database, 37 hedge funds were bullish on GE HealthCare Technologies Inc., up from 8 funds in the prior quarter.

Like Philip Morris International Inc., Univar Solutions Inc., and Garrett Motion Inc., GE HealthCare Technologies Inc. is one of the top value stocks in Mario Gabelli’s Q1 portfolio.

Vulcan Value Partners made the following comment about GE HealthCare Technologies Inc. in its Q1 2023 investor letter:

“We sold GE HealthCare Technologies Inc. during the quarter. GE HealthCare is a recent spin-off from General Electric Company and provides imaging, ultrasound, patient care solutions and pharmaceutical diagnostics to customers around the world. The company is a leader in a global oligopoly and has a massive installed base. Half of the company’s revenue is recurring, margins are stable to rising, and it generates significant free cash flow. As a recent operating unit inside of GE, we believe the market has been undervaluing this asset. Although the spin price reflected this under-valuation, after the spin-off, its stock price rose to meet our estimate of its intrinsic value, and we sold the position. GE HealthCare remains on our MVP list.”

5. Gold Fields Limited (NYSE:GFI)

Stake Value of GAMCO Investors: $771,228

Number of Hedge Fund Holders: 12

Gold Fields Limited (NYSE:GFI) is a South African gold production company that possesses reserves and resources in Chile, South Africa, Ghana, West Africa, Australia, and Peru. In addition to its gold operations, the company is involved in the exploration of copper deposits. In Q1 2023, Mario Gabelli added Gold Fields Limited to his portfolio by acquiring 57,900 shares worth $771,228. It is one of the best value stocks to invest in according to the billionaire.

On May 3, HSBC analyst Leroy Mnguni downgraded Gold Fields to Reduce from Hold and adjusted the price target to ZAR 220, an increase from ZAR 209. The analyst highlighted that the South African gold miners, including Gold Fields Limited, have exhibited better performance compared to their peers and are currently trading at higher valuation multiples. Consequently, the analyst no longer perceives Gold Fields Limited as being attractively priced. The downgrade of Gold Fields Limited is influenced by the recent outperformance of the gold sector as a whole.

According to Insider Monkey’s first quarter database, Gold Fields Limited was part of 12 hedge fund portfolios, compared to 17 funds in the prior quarter. William B. Gray’s Orbis Investment Management is the largest stakeholder of the company.

Here is what Baron Funds specifically said about Gold Fields Limited in its Q2 2022 investor letter:

“Gold Fields Limited is an established gold producer based in South Africa with a diversified global portfolio of precious metals assets. Shares fell due to the pullback in gold prices and the company’s announced acquisition of gold producer Yamana Gold at a large premium. We are positive on gold prices and expect continuous improvements in Gold Fields’ cash costs. We expect at least 50% production growth over the next decade as the company ramps up volumes, including Yamana’s high quality development projects in Chile, Canada, and Brazil.”

4. Univar Solutions Inc. (NYSE:UNVR)

Stake Value of GAMCO Investors: $920,413

Number of Hedge Fund Holders: 42

Univar Solutions Inc. is a global distributor of both commodity and specialty chemical products for different industries. Securities filings for Q1 2023 reveal that Mario Gabelli’s GAMCO Investors bought 26,275 shares of Univar Solutions Inc. worth $920,413. It is one of the top value stock picks of the billionaire in 2023.

On May 8, Univar Solutions Inc. reported a Q1 non-GAAP EPS of $0.63 and a revenue of $2.68 billion, outperforming Wall Street estimates by $0.05 and $250 million, respectively.

According to Insider Monkey’s first quarter database, 42 hedge funds were bullish on Univar Solutions Inc., compared to 40 funds in the prior quarter. Matthew Halbower’s Pentwater Capital Management is the biggest stakeholder of the company, with 5.75 million shares worth $201.4 million.

Meridian Contrarian Fund made the following comment about Univar Solutions Inc. in its Q4 2022 investor letter:

“Univar Solutions Inc. is the second largest distributor of industrial and specialty chemicals in the world, serving as a key logistics and sourcing partner across the coatings and lubricants industries and, increasingly, in the food and pharmaceutical industries. Following several years of volatile results, management took a variety of steps to sharpen Univar’s strategy, including divesting several commodity businesses, revamping sales practices to a consultative approach, and integrating a singular enterprise resource planning platform. During the quarter, the stock rallied as the company delivered a strong set of operational results and was the subject of an acquisition rumor. As we anticipate more operational success, we maintained our exposure.”

3. Philip Morris International Inc. (NYSE:PM)

Stake Value of GAMCO Investors: $2,282,458

Number of Hedge Fund Holders: 55

Philip Morris International Inc., the American tobacco giant, was one of the newest additions in Mario Gabelli’s hedge fund. The billionaire purchased 23,470 shares of the company worth $2.28 million as of March end, making it one of the top value plays in his Q1 2023 portfolio.

On April 13, Stifel resumed coverage of Philip Morris International Inc. with a Buy rating and a $114 price target. The analyst considers Philip Morris International Inc. to be one of the top investment opportunities within the industry, citing its potential for “exceptional growth” compared to other companies in the tobacco and consumer staples sectors.

According to Insider Monkey’s first quarter database, 55 hedge funds were long Philip Morris International Inc., compared to 47 funds in the last quarter. Rajiv Jain’s GQG Partners is the largest stakeholder of the company, with 21.5 million shares worth over $2 billion.

Artisan Value Income Fund made the following comment about Philip Morris International Inc. in its Q4 2022 investor letter:

“Our top individual contributors were Philip Morris International Inc., EOG Resources and Merck. Despite being US-based, tobacco company PM derives all its sales from outside the US. As a result, foreign exchange impacts can be an important driver of near-term returns, and the recent weakening in the US dollar should provide a strong tailwind for earnings due to translation effects. However, our investment case is not tied to currency movements. By virtue of its globally known brands, PM is the best-in-class operator with a well-diversified business, particularly by geography. We believe its next generation heat-not-burn product IQOS should gain share as consumers continue migrating to safer tobacco delivery systems. The company is progressing toward its acquisition of Swedish Match, a Swedish tobacco and nicotine products maker, which was previously held in the portfolio. The deal is a good fit for PM as it reduces PM’s dependence on cigarettes—a category in steady decline—and accelerates the company’s transition to smokeless “reduced-risk” products (RRPs)—a category that has experienced rapid growth over the past five years. PM can also leverage its global scale to generate significant revenue synergies from these complementary product sets, as well as quickly gain access to the US market—the world’s largest market for RRPs and one where regulators have embraced RRPs and other less harmful nicotine products. Looking at PM through our margin-of-safety criteria, the business trades for an undemanding valuation and has extraordinary business economics and a strong credit profile.”

2. TravelCenters of America Inc. (NASDAQ:TA)

Stake Value of GAMCO Investors: $7,539,773

Number of Hedge Fund Holders: 26

TravelCenters of America Inc. (NASDAQ:TA) is an operator of travel centers, truck service facilities, and restaurants in the United States and Canada. In Q1 2023, Mario Gabelli increased his stake in TravelCenters of America Inc. by 137%, holding 87,165 shares worth $7.5 million. It is one of the top value picks of the billionaire this year.

On February 17, BMO Capital analyst Ari Klein raised the firm’s price target on TravelCenters of America Inc. to $86 from $60 and kept a Market Perform rating on the shares, in light of the company’s agreement to be acquired by BP at $86 per share. According to the analyst, the acquisition is expected to provide increased scale and synergies, and the regulatory risk is anticipated to be minimal due to the fragmented nature of the travel center market.

According to Insider Monkey’s first quarter database, 26 hedge funds were bullish on TravelCenters of America Inc., up from 15 funds in the prior quarter. Magnetar Capital is the largest position holder in the company.

Bernzott Capital Advisors US Small Cap Value made the following comment about TravelCenters of America Inc. in its Q1 2023 investor letter:

“Consumer Discretionary contributed positively due to the 80.6% gain in TravelCenters of America Inc. (NASDAQ:TA). We initiated the position early in the quarter, finding appeal in enhanced earnings power from internal management initiatives such as upgraded IT systems, better execution in the non-fuel part of the business, and franchising opportunities for capital-light expansion. The stock jumped in February when BP agreed to acquire the company for cash at a significant premium.”

1. Garrett Motion Inc. (NASDAQ:GTX)

Stake Value of GAMCO Investors: $7,891,753

Number of Hedge Fund Holders: 29

Garrett Motion Inc. specializes in designing, manufacturing, and selling turbocharger and electric-boosting technologies for original equipment manufacturers (OEMs) of light and commercial vehicles. The company offers turbochargers for gasoline and diesel engines in light vehicles, as well as commercial vehicle turbochargers. In Q1 2023, Mario Gabelli boosted his position in Garrett Motion Inc. by 99%, holding a stake worth $7.8 million as of the end of March.

While the company reported mixed Q1 earnings, it reaffirmed its FY 2023 outlook. The projected net sales range for Garrett Motion Inc. is between $3.79 billion and $3.98 billion, versus the consensus estimate of $3.82 billion. As for net income (GAAP), it is expected to fall within the range of $231 million to $268 million. In terms of adjusted EBITDA (Non-GAAP), the forecasted range is between $585 million and $635 million.

According to Insider Monkey’s first quarter database, 29 hedge funds were long Garrett Motion Inc., compared to 25 funds in the earlier quarter. Howard Marks’ Oaktree Capital Management is the largest stakeholder of the company.

Alluvial Capital Management made the following comment about Garrett Motion Inc. in its Q4 2022 investor letter:

“On the topic of superchargers, our investment in Garrett Motion Inc. (NASDAQ:GTX) preferred shares is performing well. Garrett Motion shares have been rising as the semiconductor supply chain normalizes, unsnarling automotive production. Additionally, rumors of a possible sale began swirling in November. The company has not commented on the rumors, but an eventual sale has always been the most likely outcome for Garrett Motion. Should a sale come to pass, I think holders of Garrett’s convertible preferreds can expect at least $12.”

Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily enewsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also check out Billionaire John Paulson’s 2023 Portfolio: Top 15 Stock Picks and 10 Stocks to Sell in 2023 According to Billionaire Steve Cohen.