Mario Gabelli's Top 10 Holdings: A Brief Analysis

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 |  Includes: AXP, CNH, CR, CVC, DE, NFG, PCP, T, USM, VIA
by: Efsinvestment

Mario Gabelli is the founder, chairman and chief executive officer of Gabelli Asset Management Company Investors, also known as Gamco Investors. New York-based Gamco is a truly global investment firm with $30 billion dollar assets under management. Mario Gabelli founded the firm in 1977. Since then Gamco has grown into a financial titan offering diversified services. Gabelli is also a philanthropist who serves in the boards of Columbia University Graduate School of Business, Roger Williams University, as well as Boston College. Gamco's investment philosophy is similar to that of Graham & Dodd:

GAMCO Investors, Inc. is best known for its research-driven, value-oriented equity investing expertise which is based on the principles of Graham & Dodd -- that is, investing in undervalued companies that have a high probability of achieving their intrinsic or private value over time. The overall philosophy is based on a bottom-up approach to stock selection.

Here, is a brief analysis of Gabelli's top 10 equity holdings (data from Edgar Online) with their T-Metrix Scores based on analyst estimates, trailing & forward P/E ratios, and dividend yields:

Cablevision Systems Corporation (NYSE:CVC): CVC operates as a telecommunications, media, and entertainment company with a market cap of $10.57 billion. The company has a P/E ratio of 29.12, and a forward P/E ratio of 14.56. CVC is very profitable company with a gross margin of 58.40%. This year, earnings are expected to grow by 44.52% and earnings per share are expected to increase by 22.04% in the next five years. Deutsche Bank, RBC Capital Markets and Wunderlich recommend buying with target prices ranging between $37 and $44. T-Metrix score is 5.

DIRECTV (DTV): DTV is a provider of digital television entertainment in the United States and Latin America. The market cap of DTV is $38.46 billion. The company has a P/E ratio of 19.51, and a forward P/E ratio of 12.09. With a gross margin of 51.23% DTV is a highly profitable company. This year, earnings are expected to grow by 161.25% with a long term EPS growth estimate of 19.43%. Wunderlich, Kaufman Bros and Collins Stewart have positive recommendations. Chase Colman also DTV in Tiger Global's top-10 portfolio. T-Metrix score is 7. DTV screams as a must-buy among Gamco's top 10 holdings.

National Fuel Gas Co. (NYSE:NFG): NFG is a holding company with a market cap of $6.04 billion. P/E ratio is 28.52, while forward P/E ratio is 24.43. Considering the gross margin of the company, which is 40.33%, DVE is pretty profitable. EPS growth this year is 106.55%. Since last October, it's stock in in an upward momentum trend. T-Metrix Score is 1.

Viacom Inc. (NASDAQ:VIA): Viacom is an entertainment content company with a market cap of $34.61 billion. It operates in two segments: Media Networks and Filmed Entertainment. Its P/E ratio stands at 16.13, while forward P/E falls 12. Hedge funds love Viacom. Seth Clarman and Bruce Berkowitz have Viacom among their top-10 holdings. T-Metrix score 5.5 is also above average.

American Express Company (NYSE:AXP): AXP is a bank holding company providing charge and credit payment card products, and travel-related services worldwide. While American Express is well-known in North America, the rest of the world still does not know about the company. The market cap of AXP is $59.01 billion. The company has a P/E ratio of 13.67, and a forward P/E ratio of 12.03. This year earnings are expected to grow by 117.00% and earnings per share is expected to increase by 10.25% in the next five years. The net profit margin is 14.27%. T-Metrix score is 4.5.

Precision Castparts Corp. (BATS:PCP): Oregon-based PCP is a manufacturer of complex metal components and products. Company also provides investment castings, forgings and fasteners/fastener systems for aerospace and industrial gas turbine applications. PCP has a market cap of $22.17 billion. The gross margin of the company is 31.00%. Current net profit margin is 16.06. Its YTD performance of 11.02% is mediocre. Its T-Metrix score stands at 3.

United States Cellular Corp. (NYSE:USM): United States Cellular Corp. is a wireless telecommunications service provider. It offers a range of wireless handsets and laptop cards, as well as accessories. The market cap of the company is $4.20 billion. The gross margin of the company is 61.75%, which shows USM is a profitable company. However, its stock is pricey with trailing P/E ratio of 32.18, forward P/E ratio of 25.92, and T-Metrix score of 1. Interestingly, insiders increased their holdings by 28% in last six months. Insider transactions signal that USM might be a take-over candidate.

CNH Global NV (NYSE:CNH): CNH is a global, full-line company in both the agricultural and construction equipment industries. It operates in three segments: Agricultural Equipment, Construction Equipment, and Financial Services. The company was founded in 1991 and is based in Amsterdam, the Netherlands. The company has a P/E ratio of 25.69, and a forward P/E ratio of 14.42. This year earnings are expected to grow by 336.60% with a long term EPS growth estimate of 11.70%. Its T-Metrix score of 3.2 is below average.

Crane Co. (NYSE:CR): Crane Co. is a manufacturer of engineered industrial products. The company operates in five segments: Aerospace and Electronics, Engineered Materials, Merchandising Systems, Fluid Handling and Controls. With a gross margin of 33.95%, CR is a profitable company, with a market cap of $2.92 billion. The ytd performance is 22.15%. UBS and FBR Capital have positive recommendations with target prices ranging between $38 and $55. Its T-Metrix ratio of 3.5 is below average.

Deere & Company (NYSE:DE): Deere & Company provides products and services primarily for agriculture and forestry worldwide with a market cap of $41.05 billion. The company operates in three business segments: agriculture and turf, construction and forestry and credit. It was founded in 1837 and is based in Moline, Illinois. The company has a P/E ratio of 19.58, and a forward P/E ratio of 13.58. The gross margin of the company is 31.43%. This year, earnings are expected to grow by 111.34%, and earnings per share are expected to increase by 8.93% in the next five years. Recently, Longbow recommended buying with a target price of $110. Its T-Metrix grade is 3, out of 10.

Note that T-Metrix is a simple rating system mentioned by Prof. Jeremy Siegel in his book, "Stocks for the Long-Run." Based on this grading system S&P 500 (NYSEARCA:SPY) has a T-Metrix ratio around 4 with assumptions of 9% long-term EPS growth, current yield of 1.81%, and trailing P/E ratio of 13.75.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in DTV over the next 72 hours.