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Mario Gabelli Adds GenCorp - Was It the Real Estate?

February 21, 2013 | About:
Sally Jones

Sally Jones

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The day after Valentine’s Day, GAMCO Investors’ Chairman and Chief Executive Officer Mario Gabelli made a 12.4% add when he purchased steadily climbing GenCorp (GY) stock at $11.75. His current shares are 5,281,187. According to Gabelli on CNBC last week, he believes that GenCorp (GY) is going to double, as well as Legg Mason (LM), the global asset management company. Headquartered in Sacramento, Calif., GenCorp is a technology-based manufacturing company, focused on aerospace and defense, pharmaceutical fine chemicals, and the automotive industry. The word on the street is that GenCorp’s real estate was the hidden value in this deal.

Considered a living legend investor from the Bronx, Gabelli saw the potential in GenCorp’s real estate asset of 12,200 acres in metropolitan Sacramento, for long-term investors. Ninety-nine percent of Gencorp’s revenue is currently generated by its aerospace and defense segments. GenCorp real estate generated only an estimated $8.4 million in revenue in 2011 but has more potential.

As a leading technology-based manufacturer of aerospace and defense products for the U.S. government via customers including Raytheon and Lockheed Martin, GenCorp’s Aerojet company also announced in February 2013 another successful intercept test of a Raytheon missile block off the coast of Hawaii, demonstrating GenCorp’s industry leadership in propulsion technologies. Read more about GenCorp (GY)'s history here.

Financially strong, GAMCO Investors lists 792 stocks in a portfolio valued at $13.6 billion, with a quarter-over-quarter turnover at 6 percent. At the end of fourth quarter 2012, GAMCO Investors Inc. (GAMCO) (GBL) announced fourth quarter earnings of $17.6 million, and assets under management at $36.4 billion, a record at year-end. For revenue, GAMCO Investors ranks higher than 92% of the 13 companies in the industry. For earnings yield, GAMCO Investors ranks higher than 54% of the 13 companies in the industry. Read here for detailed insight into GAMCO Investors (GBL).

An interesting side note on insider trading: Gabelli added 4185.71% of GAMCO Investors Inc. (GBL) on Feb. 5, 2013. He now owns 1,200,000 shares, currently valued at $54.53. This comes after GAMCO’s modified “Dutch Auction” tender offer on Dec. 12, 2012, to purchase up to 800,000 shares of GBL Class A stock, purchasing 717,389 shares at $50 per share for a total investment of $35.9 million.

As the CEO of GAMCO Investors, Gabelli is known for his dynamic television commentary on CNN and CNBC. His “Private Market Value with a Catalyst” methodology is now an analytical standard in the value investing community. Take a look at Mario Gabelli’s holdings.

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About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

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