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Mario Gabelli Buys Over the Past Month: MEG, ZEP, BBGI, CBB

February 06, 2011 | About:
Mario Gabelli has long been one of my favorite gurus, and I’m always interested in his recent buys and sells. He’s made a number of recent portfolio adjustments in the last month that you may have missed if you don’t subscribe to GuruFocus’s Premium Membership.

Gabelli bought shares in a number of companies that were being acquired in order to claim the last few cents on the arbitrage play. These companies included Applied Signal, Lasercard Corp., and Baldor Electric. Other than those purchase, I’d like to highlight Gabelli’s other recent buys. In the past month he’s picked up shares in the following companies:

Media General (MEG): Gabelli has been trading around this position lately and currently owns 8% of the company. He picked up a few more shares on February 3. Media General is a small $125 million communications company that has interests in newspapers, television and other media services in small towns in southeast U.S. Despite showing a loss for the last three years, Media General reported decent earnings on January 27. Q4 EPS was $0.39. Revenue increased 7% YoY.

Zep (ZEP): Zep makes cleaning supplies for commercial and retail purposes. Gabelli added to his position on January 14 at $18.02 after earlier selling a big chunk on November 8 at $19.44. He currently owns 3.5% of the outstanding shares. Zep announced quarterly earnings on January 5th of $0.27 per share. Revenue impressively increased by 24% YoY. Despite these results, shares are trading near their 52 week lows.

Beasley Broadcast Group (BBGI): Gabelli made additional purchases of BBGI at $5.51 on January 12th. BBGI is a $115 million radio broadcaster and owns and operates radio stations in more than 40 markets. The radio industry has been hit hard since the financial crisis, but as the economy turns the corner advertising revenue will rise. This seems to be the bet Gabelli is making with this purchase, and he’s chosen a name that continues to have good free cash generation. Q4 results will be coming on February 8th and should be interesting. The uncertainty involved in BBGI makes it difficult to come up with a price target, but if they can continue to generate positive cash flow, Gabelli’s investment should pay handsome dividends.

CincinnatiBell (CBB): Gabelli added shares on January 3rd and currently owns slightly less than 4% of the outstanding shares. Like his other positions listed here, he’s traded around it. He had a large sale on December 21st when his holdings equaled 9.5% of the outstanding shares. Cincinnati Bell offers wired and wireless telephone services, as well as internet and cable in parts of Ohio, Kentucky, and Indiana. On the negative side, their declining wireline service provides half of their revenue. On the plus side, they are generating positive free cash flow and are expecting to continue to in the future. Earnings will be coming on February 15th and should provide more clarity for the company.

Disclosure: No positions

Editor: The most recent gurus' trades are in Real Time Picks

About the author:

Steven Kiel
Steven Kiel is the president and chief investment officer for Arquitos Capital Management, a Virginia-based investment management firm. He is a graduate of George Mason School of Law and a captain in the Army Reserves. He manages two spoke funds, The Freedom Fund, a value-oriented portfolio, and The Hayek Fund, a portfolio dedicated to free market principles. He can be contacted at steven.kiel@arquitos.com or through the firm's website at www.arquitos.com.

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