AMETEK (NYSE:AME) ranks second on our list of the 10 best stocks to buy according to billionaire Mario Gabelli’s fund. Mario Gabelli’s GAMCO Investors held a $131.7 million stake at the end of the second quarter, which was 1.18% of its portfolio, and 69 hedge funds held the stock. See which stocks rank above and below it. AMETEK makes sensors, analytical instruments, power control devices and precision motors for aircraft, chip plants, data centers, power grids and medical equipment.
How Long Gabelli Has Owned AMETEK
Gabelli’s fund opened its current position in AMETEK in the fourth quarter of 2013. It trimmed the stake in each quarter through the end of 2025. See how Gabelli’s AMETEK bet has changed over the years.
Valuation
AMETEK trades at a forward P/E of about 29.7. Its own five-year average is about 25.6. Analyst consensus has earnings per share growing about 12.5% in 2026 and about 14% in 2027. The market’s earnings grow about 10% a year over the long run. So AMETEK grows a little faster than the market at a multiple more than 50% higher. If earnings grow 12% to 14% a year, the P/E falls to about 23 in two years and 20 to 21 in three. The earnings yield is about 3.4%, only slightly above the 2.9% real yield on 10-year inflation-protected Treasury bonds.
Can AMETEK Keep Growing at This Pace?
The latest quarter was strong. Sales rose 15%, with 10% from organic growth. Earnings per share rose 17% to $2.09. Orders rose 28% and the order backlog hit a record. Management raised full-year earnings guidance. Guidance points to slower organic sales growth in the second half, in the mid-to-high single digits.
The Bull Case: Small Parts, Big Pricing Power
AMETEK has pricing power because its sensors and instruments cost little next to the systems they protect, so customers rarely switch to an untested supplier. It sells into several growing markets at once, including power for data centers, chipmaking equipment, aircraft and grid upgrades. A slowdown in one market does not stop growth in the others. AMETEK also buys niche businesses and runs them through the same operating model, which has been a repeatable way to add earnings. TCW’s Relative Value Large Cap Fund added the stock in the fourth quarter of 2025. See what TCW said about AMETEK.
The Bear Case: A Full Price and a Big Integration
The stock already prices in years of strong growth. Customers in chips, data centers and aerospace spend in cycles, so demand can drop. Giverny Capital Asset Management exited its AMETEK position in February at $232 a share because of the valuation gap. The stock closed above that price on October 8. See why Giverny stepped away from AMETEK.
While we acknowledge the risk and potential of AME as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AME and that has 10,000% upside potential, check out our report about this cheapest AI stock.
READ NEXT: 33 Stocks That Should Double in 3 Years and Cathie Wood 2026 Portfolio: 10 Best Stocks to Buy
Follow Insider Monkey on Google News.
This article is originally published at Insider Monkey.
