In this piece, we will take a look at the ten industrial stocks to buy today according to Mario Gabelli’s GAMCO Investors.
GAMCO Investors is an American hedge fund that is responsible for providing investment and consultancy services to institutional investors, mutual funds, and others. It was founded by the Italian-American billionaire Mr. Mario Gabelli in 1976.
Mr. Gabelli is an American of Italian descent who was born in New York City, United States, in 1942, making him one of the oldest hedge fund executives out there. As opposed to some of his other peers in the industry, who had a late start, Mr. Gabelli took an interest in the stock market at an early stage, which is evidenced by his first stock purchase that he made just as his teenage years started when he was 13 years old. After graduating high school, he would go on to attend Fordham University on a scholarship, following which the executive would enroll in the prestigious Columbia Business School.
After receiving his Master of Business Administration (MBA) from Columbia, Mr. Gabelli would start his long career in the financial industry. His first job would see him work as a security analyst for the brokerage firm Loeb, Rhoades & Co. This would see him analyze automotive and farm equipment firms alongside media and broadcasting companies. During his time at Loeb, the now hedge fund executive would extensively focus on what is termed as the discounted cash flow (DCF) approach to valuing a firm. This approach only takes a cursory look at a company’s share price, and instead meticulously breaks down its cash flows to project them and then evaluate what a private investor would be willing to pay in the hypothetical scenario of an acquisition.
Mr. Gabelli would set up what is now known as GAMCO Investors after moving on from Loeb. He set the firm up in 1976, initially dubbed Gabelli & Co. Gabelli & Co. was an institutional brokerage that Mr. Gabelli set up using his own money. Ten years later, he would launch the firm’s first fund for the general public. Dubbed The Gabelli Asset Fund, this required an initial investment of $25,000 at the time. However, now it has brought down this fee to $1,000.
Over the course of the years, Mr. Gabelli rapidly grew his hedge fund business, which was managing $16.3 billion close to the turn of a new millennium. His ten equity funds had an astounding return rate of 31.7% in 1998. The company held its initial public offering (IPO) on the New York Stock Exchange (NYSE) in 1997.
The company changed its name to GAMCO Investors in August 2005. By the end of the fourth quarter of last year, it had a portfolio worth $11 billion, which made it one of the largest hedge funds in the world. Some of the renowned holdings in this portfolio are Wells Fargo & Company (NYSE:WFC), The Walt Disney Company (NYSE:DIS), and Sony Group Corporation (NYSE:SONY).
Our Methodology
In order to sift out GAMCO Investors’ top industrial stock picks, we scanned its filings with the Securities and Exchange Commission for the fourth quarter of last year. After identifying the companies, we then took a look at their analyst coverage, quarterly earnings, investor letters, large shareholders, and hedge fund sentiment courtesy of Insider Monkey’s survey of 924 hedge funds for Q4 2021 in order to gain a broad understanding of them.
10 Industrial Stocks to Buy Today According to Mario Gabelli’s GAMCO Investors
10. Kaman Corporation (NYSE:KAMN)
GAMCO Investors’ Stake Value: $101 million
Percentage of GAMCO Investors’ 13F Portfolio: 0.86%
Number of Hedge Fund Holders: 10
Kaman Corporation (NYSE:KAMN) is an American company headquartered in Bloomfield, Connecticut. It sells products such as seals, springs, contacts, missile arming solutions, aero structures for fixed and rotary wing aircraft, and medical imaging systems.
For its fiscal Q4, Kaman Corporation reported $175 million in revenue and $0.48 in non-GAAP EPS, in a mixed bag of results that saw it beat analyst EPS estimates but miss them for revenue. KeyBanc lowered its price target to $52 from $59 in February 2022, outlining that the company’s shares dropped after its earnings report.
GAMCO Investors held a $101 million stake in Kaman Corporation during Q4 2021. This came in the form of 2.3 million shares and it represented 0.86% of the firm’s investment portfolio. During the same time period, 10 of the 924 hedge funds part of Insider Monkey’s survey also owned the company’s shares.
Kaman Corporation’s largest investor after GAMCO Investors is Amy Minella’s Cardinal Capital which owns 1.2 million shares worth $54 million.
Kaman Corporation joins The Walt Disney Company, Wells Fargo & Company, and Sony Group Corporation in the list of GAMCO Investors’ top stock picks.
9. Griffon Corporation (NYSE:GFF)
GAMCO Investors’ Stake Value: $104 million
Percentage of GAMCO Investors’ 13F Portfolio: 0.89%
Number of Hedge Fund Holders: 12
Griffon Corporation (NYSE:GFF) is a buildings products provider that sells across several countries and is headquartered in the United States. The company sells rolling steel doors and grilles to industrial users.
Mr. Gabelli’s hedge fund held a $104 million stake in Griffon Corporation during the fourth quarter of last year. This came in the form of 3.6 million shares and it represented 0.89% of the firm’s investment portfolio. During the same time period, 12 of the 924 hedge funds part of Insider Monkey’s research owned a stake in the company.
Griffon Corporation reported $591 million in revenue and $0.26 in GAAP EPS for its fiscal Q1, managing to beat analyst estimates for both. Baird reduced the company’s share price target to $34 from $36 in November 2021, outlining that the company faces cost headwinds.
Travis Cocke’s Voss Capital is Griffon Corporation’s largest investor after GAMCO Investors. It has a $37 million stake that comes through owning 1.3 million shares.
8. AMETEK, Inc. (NYSE:AME)
GAMCO Investors’ Stake Value: $116.9 million
Percentage of GAMCO Investors’ 13F Portfolio: 1%
Number of Hedge Fund Holders: 37
AMETEK, Inc. (NYSE:AME) sells electronic instruments and electromechanical devices to industries. Its products include uninterruptible power supplies, sensors, power quality measurement instruments, and other products for aerospace, industrial, food and beverage, and other industries.
By the end of its fiscal Q4, AMETEK, Inc. had earned $1.5 billion in revenue and $1.37 in non-GAAP EPS, beating analyst estimates for both. Mizuho set a $159 price target for the company in December 2021, stating that despite supply chain and inflation constraints, the company continued to execute.
GAMCO Investors owned a $116.9 million stake in AMETEK, Inc. by the end of December 2021. This came via 795,362 shares and represented 1% of its investment portfolio. Insider Monkey surveyed 924 hedge fund holdings for Q4 2021 and discovered that 37 contained the company’s stock.
Israel Englander’s Millennium Management is AMETEK, Inc.’s largest investor. It has a $152.7 million stake that comes through owning one million shares.
ClearBridge Investments mentioned the company in its third quarter 2021 investor letter. Here is what the fund said:
“We sold AMETEK, in the industrials sector, and used the proceeds to add RBC Bearings, which manufactures precision engineered bearings and components for highly technical machines, such as aircrafts, submarines and power transmission systems. AMETEK is a company we have held for many years, and we continued to like their long-term prospects, but believe better upside was available in RBC Bearings due to a temporary stock price dislocation created by an equity offering for a highly accretive acquisition.”
7. EnPro Industries, Inc. (NYSE:NPO)
GAMCO Investors’ Stake Value: $117 million
Percentage of GAMCO Investors’ 13F Portfolio: 1%
Number of Hedge Fund Holders: 10
EnPro Industries, Inc. (NYSE:NPO) is an engineered industrial products manufacturer based in the United States. The company manufactures a host of products that cover the needs of a wide variety of firms. Some of its products include gaskets, seals, compression packing products, expansion joints, and more for industries such as chip manufacturing and aerospace.
Mr. Gabelli’s hedge fund owned one million EnPro Industries, Inc. shares by the end of the fourth quarter of last year. These were worth $117 million and the stake represented 1% of its investment portfolio. During the same time period, 10 of the 924 hedge funds polled by Insider Monkey had invested in the firm.
EnPro Industries, Inc. reported $280 million in revenue and $1.23 in non-GAAP EPS for its fourth fiscal quarter, beating analyst estimates for both metrics. KeyBanc raised its price target to $132 from $115 in November 2021, outlining that acquisitions and strong execution are plus points for the company.
EnPro Industries, Inc.’s largest investor after GAMCO Investors is David Paradice’s Paradice Investment Management which owns 675,493 shares worth $74 million.
6. Watts Water Technologies, Inc. (NYSE:WTS)
GAMCO Investors’ Stake Value: $126 million
Percentage of GAMCO Investors’ 13F Portfolio: 1.08%
Number of Hedge Fund Holders: 23
Watts Water Technologies, Inc. (NYSE:WTS) sells residential and commercial flow products. These products are used to prevent the backflow of water and other liquids, regulate pressure, and monitor temperatures. Additionally, the firm also sells heating, drainage, and water re-use products.
For its fourth fiscal fourth quarter, Watts Water Technologies, Inc. reported $473 million in revenue and $1.42 in non-GAAP EPS, for a strong set of results that beat analyst estimates. Stifel lowered its price target to $148 from $159 in April 2022, highlighting its belief that things might not improve much over 2021.
By the end of the fourth quarter of 2021, GAMCO Investors had owned 653,757 Watts Water Technologies, Inc. shares which were worth $126 million and represented 1.08% of its investment portfolio. Insider Monkey’s analysis of 924 hedge funds for the same time period revealed that 23 had also invested in the company.
Watts Water Technologies, Inc.’s largest investor is Ian Simm’s Impax Asset Management which owns 1.8 million shares worth $356 million.
Along with Wells Fargo & Company, The Walt Disney Company, and Sony Group Corporation, Watts Water Technologies, Inc. is a top Mario Gabelli stock pick.
5. Textron Inc. (NYSE:TXT)
GAMCO Investors’ Stake Value: $148 million
Percentage of GAMCO Investors’ 13F Portfolio: 1.27%
Number of Hedge Fund Holders: 35
Textron Inc. (NYSE:TXT) is a diversified company that targets the industrial, defense, aerospace, and financial sectors. Its industrial division sells products such as plastic tanks and fuel systems for a wide variety of users.
Textron Inc. had raked in $3 billion in revenue and $0.94 in non-GAAP EPS for its fiscal fourth quarter, in a poor set of results that missed analyst estimates for both the metrics. The company received an order for up to 30 Cessna jets in April 2022 from an aviation company.
Mr. Gabelli’s hedge fund had a $148 million stake in Textron Inc. by the end of Q4 2021. This came through the firm owning 1.9 million shares and represented 1.27% of the firm’s investment portfolio. Insider Monkey’s poll of 924 hedge funds during the same time period revealed that 35 had owned the company’s shares.
Phill Gross and Robert Atchinson’s Adage Capital Management is Textron Inc.’s largest investor. It owns a $339 million stake that comes via 4.3 million shares.
4. Crane Co. (NYSE:CR)
GAMCO Investors’ Stake Value: $150 million
Percentage of GAMCO Investors’ 13F Portfolio: 1.28%
Number of Hedge Fund Holders: 25
Crane Co. (NYSE:CR) is an industrial equipment seller that operates in the United States, United Kingdom, Canada, and other countries. The company sells products such as valves, fluid control instruments, and pumps to companies operating in several industries.
GAMCO Investors’ stake in Crane Co. for the fourth quarter of last year was worth $150 million. It came through the firm owning 1.4 million shares and represented 1.28% of its investment portfolio. Insider Monkey’s Q4 2021 survey of 924 hedge funds listed 25 as the firm’s investors.
Crane Co. reported $770 million in revenue and $1.25 in non-GAAP EPS for its fourth fiscal quarter, beating Wall Street analyst estimates for both. Stifel lowered its price target to $134 from $137 in April 2022, outlining that the industrial sector is in for little growth during the second quarter of this year.
Crane Co.’s largest investor after GAMCO Investors is Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital which owns 499,082 shares worth $50 million.
3. GATX Corporation (NYSE:GATX)
GAMCO Investors’ Stake Value: $175 million
Percentage of GAMCO Investors’ 13F Portfolio: 1.5%
Number of Hedge Fund Holders: 14
GATX Corporation (NYSE:GATX) is an American railcar leasing company that is headquartered in Chicago, Illinois, and was founded in 1898. It leases tanks and railcars for several heavy duty industries such as petroleum, chemical, agriculture, and transportation.
GAMCO Investors owned a $175 million stake in GATX Corporation as the fourth quarter of last year came to an end. This was in the form of 1.6 million shares and it represented 1.5% of the firm’s investment portfolio. During the same time period, 14 of the 924 hedge funds polled by Insider Monkey had also invested in the company.
GATX Corporation’s fiscal fourth quarter revenue and non-GAAP EPS stood at $321 million and $1.58, respectively as it beat analyst estimates for both metrics. Wells Fargo raised the company’s share price target to $120 from $110 in January 2022, stating that tailwinds in the leasing environment will benefit the company.
GATX Corporation’s largest investor after GAMCO Investors is Israel Englander’s Millennium Management. It has an $18 million stake that comes via 179,109 shares.
2. Mueller Industries, Inc. (NYSE:MLI)
GAMCO Investors’ Stake Value: $184 million
Percentage of GAMCO Investors’ 13F Portfolio: 1.57%
Number of Hedge Fund Holders: 18
Mueller Industries, Inc. (NYSE:MLI) is a metal and plastics products manufacturer located in the United States. The company’s industrial segment sells products such as rods, valves, fittings, casting, forging, and fluid control systems.
As its fiscal fourth quarter came to an end, Mueller Industries, Inc. had managed to rake in $956 million in revenue and $2.21 in GAAP EPS. The revenue marked an impressive 41% annual growth. The company also raised its quarterly dividend to 25 cents a share in February 2022.
Mr. Gabelli’s hedge fund owned 3 million Mueller Industries, Inc. shares by the end of Q4 2021. This amounted to a $184 million stake and it represented 1.57% of the firm’s investment portfolio. During the same time period, 18 of the 924 hedge funds part of Insider Monkey’s survey had invested in the company.
Chuck Royce’s Royce & Associates is Mueller Industries, Inc.’s second largest investor through a $38 million stake courtesy of 647,002 shares.
1. CNH Industrial N.V. (NYSE:CNHI)
GAMCO Investors’ Stake Value: $233 million
Percentage of GAMCO Investors’ 13F Portfolio: 1.99%
Number of Hedge Fund Holders: 35
CNH Industrial N.V. (NYSE:CNHI) is a British company headquartered in London. The company offers several kinds of equipment to the farming, construction, transportation, and power generation segments.
GAMCO Investors held a $233 million stake in CNH Industrial N.V. during the fourth quarter of last year, by owning 9.9 million shares of the company. Insider Monkey scanned 924 hedge fund holdings during Q4 2021 and learned that 35 had also held a stake in the company.
CNH Industrial N.V. posted $9 billion in revenue and $0.25 in non-GAAP EPS for its fiscal Q4, beating analyst estimates for both. JPMorgan raised its price target to $20 from $19 in March 2022 and kept an Overweight rating on the shares.
CNH Industrial N.V.’s largest investor is Natixis Global Asset Management’s Harris Associates which owns 97.9 million shares worth $1.9 billion.
Oakmark Funds mentioned the company in its fourth quarter 2021 investor letter. Here is what the fund said:
“Despite ongoing concerns about supply shortages, CNH Industrial (U.K.) was a top contributor to the Fund’s performance for the quarter. In November, the global agricultural and construction equipment manufacturer reported excellent third-quarter results, highlighted by strong organic growth and margin expansion. Within the company’s largest division, agricultural equipment, sales trended ahead of expectations as CNH benefited from rising farmer incomes, low channel inventory levels and aging fleets that farmers are looking to upgrade with enhanced technology. Net pricing in this segment was strongly positive and more than offset rising cost inflation. During the quarter, CNH shareholders approved the spin-off of its “on-highway” business, Iveco Group. CNH shares began trading without Iveco in early January. We believe the separation made strategic and financial sense and will allow for increased focus and value creation.”
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This article is originally published at Insider Monkey.
