Mario Gabelli is the founder, chairman, and CEO of Gabelli Asset Management Company Investors (GAMCO), a firm that manages over $30 billion in global investments. Gabelli is a proponent of the Graham-Dodd school of analysis and uses a bottom-up approach that examines the private market value of a firm. He targets undervalued companies that have a high probability of reaching their intrinsic value over time. He has also successfully made investments by identifying broad macro trends. His Asset Fund has earned a 10-year cumulative return of 87.5%, outperforming the S&P 500, which returned only 16.4% over the same stretch. According to his latest 13D filings, Gabelli added to his position in Thomas & Betts Corp. (TNB) by 9%.
Holding History
Gabelli first bought Thomas & Betts in the fourth quarter of 2008 when the price of the stock fell nearly 45%. He purchased 4,028,423 shares for an average price of $22.70. As prices rebounded, Gabelli sold in small amounts. In the first quarter of 2010, he made a notable sell of 1.3 million shares for an average price of $36.37, yielding a 60% return on his initial purchase. Overall, between 2008 and 2010, he sold more than 1.6 million shares at an average of $35.48 per share. However, he has recently been adding again to his holdings, buying more than 300,000 shares in each of the last two quarters for an average price of $45.51 and $53.51 respectively. Most recently, Gabelli added another 9% to his holdings at an average price of $49.20, giving him a total of 3,280,698 shares in the company.
Thomas & Betts Corp. (TNB)
Thomas & Betts Corporation is a leading manufacturer of connectors and components for worldwide electrical and electronics markets. Thomas & Betts operates manufacturing, distribution and office facilities around the globe. The company designs, manufactures and sells components used in assembling, maintaining and repairing electrical, electronic and communications systems.
According to Thomas & Betts's second-quarter earnings report, net sales increased by 13.3% year-over-year from $500 million to $566.3 million. Excluding acquisitions, sales increased 11%. This includes a 10% increase in electrical segment sales, with 4% coming from increased demand for industrial and utility products organic growth and the remainder from price increases to offset rising raw material costs. Steel structures segment sales were up 18.4% year-over-year, with profit margins down from 16.2% to 7.3% of sales as a result of a competitive pricing environment. HVAC segment sales increased 13.2% year-over-year, with profit margins increasing as a result of improved mix and manufacturing leverage. Net earnings excluding unusual items increased from $33.6 million last year to $43.46 million, a 29% increase. Free cash flow was a $26.6 million loss, down from last year's $63.7 million gain.
According to Dominic J. Pileggi, chairman and CEO of Thomas & Betts, "Demand evolved largely as we expected despite increasing competitive pressures in certain sectors. We continued to execute our global vertical market strategies, refine our manufacturing footprint and take action to manage price/cost parity." He also expects "year-over-year improvement in demand for industrial and utility products and relatively flat demand for construction products." The company narrowed its earnings-per-share guidance for the year to $3.20 - $3.35 per share, up from the previous range of $3.15 - $3.35 per share.
Thomas & Betts has a market cap of $2.56 billion. The stock trades with a P/E ratio of 15.8, slightly below its seven-year historical average. Its P/S ratio of 1.3 stands above its historical average, though its P/B ratio of 1.6 is slightly below its historical average. Book value per share has been increasing over the past two years, currently at a historical high of $29.81.
Recent Headlines
On 7/1/2011, Thomas & Betts acquired the AmbiRad Group, a U.K based manufacturer of specialty HVAC products. The approximately $30 million purchase price was paid from available cash resources and is expected to add approximately $20 million in sales to the second half of 2011.
This is part of GuruFocus Real Time Picks report, which reports the stock trades of Gurus within the last few days. For more information, go to Real Time Picks.
Holding History
Gabelli first bought Thomas & Betts in the fourth quarter of 2008 when the price of the stock fell nearly 45%. He purchased 4,028,423 shares for an average price of $22.70. As prices rebounded, Gabelli sold in small amounts. In the first quarter of 2010, he made a notable sell of 1.3 million shares for an average price of $36.37, yielding a 60% return on his initial purchase. Overall, between 2008 and 2010, he sold more than 1.6 million shares at an average of $35.48 per share. However, he has recently been adding again to his holdings, buying more than 300,000 shares in each of the last two quarters for an average price of $45.51 and $53.51 respectively. Most recently, Gabelli added another 9% to his holdings at an average price of $49.20, giving him a total of 3,280,698 shares in the company.
Thomas & Betts Corp. (TNB)
Thomas & Betts Corporation is a leading manufacturer of connectors and components for worldwide electrical and electronics markets. Thomas & Betts operates manufacturing, distribution and office facilities around the globe. The company designs, manufactures and sells components used in assembling, maintaining and repairing electrical, electronic and communications systems.
According to Thomas & Betts's second-quarter earnings report, net sales increased by 13.3% year-over-year from $500 million to $566.3 million. Excluding acquisitions, sales increased 11%. This includes a 10% increase in electrical segment sales, with 4% coming from increased demand for industrial and utility products organic growth and the remainder from price increases to offset rising raw material costs. Steel structures segment sales were up 18.4% year-over-year, with profit margins down from 16.2% to 7.3% of sales as a result of a competitive pricing environment. HVAC segment sales increased 13.2% year-over-year, with profit margins increasing as a result of improved mix and manufacturing leverage. Net earnings excluding unusual items increased from $33.6 million last year to $43.46 million, a 29% increase. Free cash flow was a $26.6 million loss, down from last year's $63.7 million gain.
According to Dominic J. Pileggi, chairman and CEO of Thomas & Betts, "Demand evolved largely as we expected despite increasing competitive pressures in certain sectors. We continued to execute our global vertical market strategies, refine our manufacturing footprint and take action to manage price/cost parity." He also expects "year-over-year improvement in demand for industrial and utility products and relatively flat demand for construction products." The company narrowed its earnings-per-share guidance for the year to $3.20 - $3.35 per share, up from the previous range of $3.15 - $3.35 per share.
Thomas & Betts has a market cap of $2.56 billion. The stock trades with a P/E ratio of 15.8, slightly below its seven-year historical average. Its P/S ratio of 1.3 stands above its historical average, though its P/B ratio of 1.6 is slightly below its historical average. Book value per share has been increasing over the past two years, currently at a historical high of $29.81.
Recent Headlines
On 7/1/2011, Thomas & Betts acquired the AmbiRad Group, a U.K based manufacturer of specialty HVAC products. The approximately $30 million purchase price was paid from available cash resources and is expected to add approximately $20 million in sales to the second half of 2011.
This is part of GuruFocus Real Time Picks report, which reports the stock trades of Gurus within the last few days. For more information, go to Real Time Picks.
