GAMCO Investors is a publicly traded asset management company established by Mario Gabelli in 1977. Gabelli, who serves as the chairman and chief executive officer of GAMCO Investors, has run the firm primarily as a one-man show. He manages just about everything: he developed the firm’s philosophy, manages the investment process, recruits the firm’s largest clients and has the last word in any of its management’s decisions. He is also considered one of the best-known money managers in the United States, while his investment methodology combines the tenets of some of the pioneers of value-oriented investing, Benjamin Graham and David Dodd, and the reputable boss of Berkshire Hathaway, Warren Buffett. Gabelli is widely-known on Wall Street for his mix of savvy stock-picking, self-promotion, and an astonishing pay package. In this article, we will be covering three of the firm’s freshly-amended 13D filings with the SEC on the following companies: Astec Industries Inc. (NASDAQ:ASTE), The Brink’s Company (NYSE:BCO) and Mueller Industries Inc. (NYSE:MLI).
Following activist funds like Mario Gabelli’s GAMCO Investors is important because it is a very specific and focused strategy in which the investor doesn’t have to wait for catalysts to realize gains in the holding. A fund like GAMCO can simply create its own catalysts by pushing for them through negotiations with the company’s management and directors. In recent years, the average returns of activists’ hedge funds has been much higher than the returns of an average hedge fund. Furthermore, we believe do-it-yourself investors have an advantage over activist hedge fund investors because they don’t have to pay 2% of their assets and 20% of their gains every year to compensate hedge fund managers. We have found through extensive research that the top small-cap picks of hedge funds are also capable of generating high returns and built a system around this premise. In the 34 months since our small-cap strategy was launched it has returned over 123% and beaten the S&P 500 ETF (SPY) by more than 66 percentage points (read more details).
In a new public filing with the SEC, GAMCO Investors disclosed an ownership stake of 2.23 million shares in Astec Industries Inc. (NASDAQ:ASTE), which represents 9.71% of the company’s outstanding common stock. This marks an increase of 317,176 shares since the asset management company’s most recent 13D filing on Astec. The shares of Astec have decreased by over 3% since the beginning of the current year, partially as a result of missing analysts’ expectations for its second quarter earnings results. The manufacturer of hot-mix asphalt facilities and soil remediation equipment posted revenue of $268 million, a decrease of 3% year-over-year. At the same time, the company posted earnings per share of $0.51, down 19% from the figure of $0.63 per share reported in the same quarter a year ago. However, Astec’s management believes that the company will be able to beat its financial results from last year’s third quarter. Within our database, Chuck Royce’s Royce & Associates is the second largest investor in Astec Industries Inc. (NASDAQ:ASTE) as of March 31 with 673,228 shares, tailing only GAMCO Investors.