Mario Gabelli owns over 800 shares. Here are the top 2 they buy

Billionaire money manager Mario Gabelli is a noted value investor in the tradition of Graham and Dodd and renowned for his research-based stock investing style. His Gamco Investors The hedge fund has $32 billion in assets under management and spreads it across more than 800 stocks.

Gabelli uses a strategy it calls private market value (PMV) with a catalyst. Essentially, it means the price a private investor would pay to acquire the entire company (PMV). He then looks for stocks that are selling below that value and looks for a catalyst or event that could cause a substantial increase in value over time.

A catalyst could be the sale or spinoff of a business, a merger, an industry consolidation or even a regulatory change. It’s an important part of the stock discovery process because a stock with a below-market valuation but no catalyst will continue to languish.

While Gabelli’s methodology is his own, he focuses more on a company’s cash flows than its accounting profits. And his tactic was successful. Since its inception in 1977, Gamco Investors has achieved impressive annual returns of 16.3%.

In the second quarter, Gabelli sold most of his shares, although he did not close out any positions. However, he bought more, just a few shares. Below are the two in which he increased his position the most.

Key points about this article:

• Mario Gabelli is a renowned value investor who uses a proprietary private market valuation with a catalytic investment strategy to find stocks trading at a discount that have upside potential.
• Since the founding of the billionaire investor Gamco Investors in 1977 he returned a remarkable average annual return of 16.3%.
• If you’re looking for action with huge potential, be sure to grab our free copy brand new “Next NVIDIA” report.. It has a software stock where we are sure it has 10x potential.

Grupo Televisa (TV)

Television production studio

Grupo Televisa (NYSE:TV) isn’t the largest holding in Gabelli’s portfolio — though with 870 shares, no one position dominates anyway — but it was the stock with the largest percentage increase for the period.

The company is the leading telecommunications stock in Mexico, with segments that also serve the cable and pay TV markets. But it is an extremely competitive one that is currently struggling on price. America Mobile (NYSE:AMX) cut prices to gain shares, but Grupo Televisa raised prices, resulting in a net loss of 66,000 customers in the second quarter. It didn’t help that the Mexican peso weakened as well.

Shares of Grupo Televisa are down 12% in 2024, even after recently rebounding 50% higher from early September lows. Gabelli likely sees several catalysts for telecom transformation. The company is participating in ongoing industry consolidation by purchasing from AT&T (NYSE:T) is 41% interest in Sky Mexicowhich gives Televisa full control of the company. It also holds a 45% stake in a joint venture with Univision, the largest Spanish-language media company, called TelevisaUnivision. There is the potential for JV to go public.

TV stock trades at deeply discounted valuations, going for just a fraction of its sales and book value, and a wildly deflated stream of twice the free cash flow it produces. If the catalysts work, Gabelli could see PMV increase significantly.

It increased its holding by 1.2 million shares in the quarter, giving it a total of 15.9 million shares valued at $44 million.

National Fuel Gas (NFG)

Natural gas flame on a stove

Gabelli’s second-highest percentage stock increase during that period was for National Fuel Gases (NYSE:NFG), a diversified natural gas company targeting the U.S. Appalachian region for exploration and production, pipelines, storage, gathering and utilities.

Although a small player in the industry with a market valuation of $5.5 billion, National Fuel Gas has been a reliable dividend stock for investors. It began paying dividends in 1902 and has maintained a consistent payout record for over 120 years. More impressively, the natural gas company is a Dividend King, or a stock that has increased its dividend for 50 or more years. National Fuel Gas has increased its payout for 54 consecutive years, a record that very few companies hold.

Shares of NFG are up 22% this year and could continue to rise. The US Energy Information Administration forecasts consumption, prices and production increase through the winter months and until 2025.

Gabelli added more than 44,000 shares to his position, giving him a total of 1.37 million shares, worth $74 million. But its average purchase price is $62 per share, so it shows a small loss at the moment. While NFG shares are up sharply year-to-date, the stock is still trading nearly 20% below its June 2022 high.

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