Mario Gabelli‘s GAMCO Investors is one of the funds that has been consistently beating the S&P 500 over the long term, since its inception in 1986. Mr. Gabelli is one of the few direct followers of the Graham and Dodd investing approach, which started the value investing strategy. Mr. Gabelli is known for his successful bets on companies that have high chances of being taken over, since his strategy involves assessing a public company’s potential from the perspective of an acquirer, which means a focus on its cash flow rather than earnings. GAMCO has recently revealed its 13F filing for the third quarter, in which it disclosed a significant reduction in most of its top holdings. Overall, GAMCO’s portfolio had a value of $15.22 billion, down from $18.46 billion disclosed a quarter earlier. In this article, we will take a look at GAMCO’s five largest holdings, represented by stocks from the Consumer, Industrial, and Financial sectors. These sectors collectively represent around 60% of its equity portfolio.
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Let’s start with Cablevision Systems Corporation (NYSE:CVC), in which GAMCO owns 9.94 million shares worth $322.77 million as of the end of September. During the third quarter, while the stock surged by 36%, GAMCO reduced its position in the company by 13%. As stated earlier, Mr. Gabelli often bets on companies that have the potential to be taken over, and Cablevision Systems Corporation (NYSE:CVC) was one such bet that paid off, as in September, Cablevision agreed to be acquired by Netherlands-based Altice in a $17.7 billion deal, which values the company at $34.90 per share. Overall the stock has gained over 57% since the beginning of the year. During the third quarter, Jonathan Lourie and Stuart Fiertz’s Cheyne Capital initiated a stake of 746,549 shares in Cablevision Systems Corporation (NYSE:CVC).
In Bank of New York Mellon Corp (NYSE:BK), GAMCO also trimmed its position by 8% to 6.15 million shares valued at $240.62 million. Bank of New York Mellon recently reported its financial results for the third quarter, which showed a decline in both EPS and revenue compared with the year-ago period, although the earnings per share of $0.74 were above the estimates of $0.71. On the other hand, revenue of $3.79 billion was below the projected $3.87 billion. Earlier this year Gabelli said that he likes Bank of New York Mellon Corp (NYSE:BK) because of its good fundamentals, but he also likes the fact that the company is currently targeted by activist investor Nelson Peltz of Trian Partners, who has been trying to spin-off the bank’s custody business. John Horseman’s Horseman Capital Management is another shareholder of Bank of New York Mellon Corp (NYSE:BK), owning 1.22 million shares as of the end of September.