Mario Gabelli (Trades, Portfolio) is the founder, chairman, and CEO of GAMCO Investors, a $30 billion dollar global investment firm headquartered in Rye, New York. The investor reported reducing his stake in Superior Industries International (SUP, Financial) by 1.2%, according to 1,884,951 shares. However, the guru is the major shareholder as of the end of the fourth quarter.
The fund initiated a position more than five years ago, and since then Gabelli added and reduced the stake, but in 2015, he reduced the stake each quarter 1.88 million. The stock price dropped by 8% in that time frame, so he had probably taken advantage of that depreciation to take the gains. However, Superior Industries International’s shares gained almost 20% year to date.
Superior Industries designs, manufactures and sells aluminum road wheels to the original equipment manufacturers in North America. It also has a $565.2 million market cap.
For the fourth quarter, revenues increased by 4.3% year-over-year and EPS increased to 38 cents. Both figures have beaten the analyst’s expectations by $3.91 million and 4 cents, respectively. Moreover, the gross profit for the fourth quarter inched up by 104.5% to $23.6 million from $11.5 million in the previous year.
The increase was due to higher unit shipments and a favorable product mix. Further, the company has improved operating costs related to the closure of a manufacturing facility and a new facility in Mexico.
Shareholders of Superior Industries were gaining value because of the firm’s dividend policy and share repurchase program. Apart from announcing a quarterly dividend payment of 18 cents per share, the company paid out $19.1 million in 2015. Moreover, it has repurchased 287,023 shares of stock at a cost of $5.3 million in the September to December period. Finally, the board of directors authorized a new $50 million stock repurchase program, and it has repurchased 79,213 shares for a total of $1.5 million through March 7.
The stock sells at a trailing P/E of 24.79x, a premium compared to an average of 14.74x for the industry. To use another metric, its price-to-book ratio of 1.41x also indicates a premium versus the industry average of 1.39x, while the price-to-sales ratio of 0.81x is above the industry average of 0.67x and is close to five-year high of 0.89x.
Guru positions
Several gurus have been bullish on the stock. Jim Simons (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio) and John Rogers (Trades, Portfolio) upped their stakes by 46.03%, 0.64% and 0.54%, respectively. Chuck Royce (Trades, Portfolio) is the second-largest investor in the company of the gurus, as he reported holding 681,500 shares, having decreased the position by 4% in the quarter. However, this position didn´t represent a significant portion of Royce’s portfolio, at only 0.07% of the total value.
Disclosure: Omar Venerio holds no position in any stocks mentioned.
