GAMCO Investors, the hedge fund run by Mario Gabelli has announced in a regulatory filing with Security and Exchange Commission that it has increased its stake in Tredegar Corporation (NYSE:TG) and Medical Action Industries (NASDAQ:MDCI).
The value investor has acquired additional 732,740 shares in Tredegar Corporation (NYSE:TG), increasing its stake to 4.8 million. The 15% holding has a current market value of $101 million. In February, Gabelli succeeded in convincing Tredegar Corporation (NYSE:TG) to give up on its poison pill. Taking advantage of the new opportunity, the legendary investor has added around 1 million shares to its original 11.7% stake, as the stock continued its decline. Year-to- date Tredegar Corporation (NYSE:TG) has lost more than 26% of its market value on worsening business prospects.
Tredegar Corporation (NYSE:TG) is a plastic films manufacturer that has a market capitalization of close to $700 million and its shares currently trade at $21.21.
In a second move announced today, Gabelli has significantly upped its stake in Medical Action Industries (NASDAQ:MDCI), suggesting it is getting involved in merger arbitrage. The investor has added 1 million shares to the previous stake of 252,164 shares, increasing its holding to 7.86%. In late June, Medical Action Industries (NASDAQ:MDCI) agreed to be acquired by Owens & Minor, Inc.(NYSE:OMI) for $208 million and now the deal is in pending state. The bid price for Medical Action Industries (NASDAQ:MDCI) represents a premium of around 90%. The company’s stock trades now at $13.78 and at this price the medical products manufacturer has a market capitalization of $227 million, which is $19 million above the bid offer.
Mario Gabelli’s GAMCO Investors has beaten the S&P 500 by around 2% a year since its inception in 1986. At the moment, his equity portfolio is worth $19 billion and is extremely diversified across sectors and stocks. Gabelli’s top stock picks for the second quarter are DIRECTV (NASDAQ:DTV), American Express Company (NYSE:AXP) and Viacom, Inc. (NASDAQ:VIA).