Mario Gabelli (Trades, Portfolio), founder of the $43 billion global financial services company GAMCO Investors (GBL, Financial), this week added to his positions in two stocks, Tredegar Corp (TG, Financial) and Medical Action Industries (MDCI). Gabelli’s team evaluates stocks based on fundamental bottoms-up research.
According to GuruFocus Real Time Picks, the larger addition was to Medical Action Industries, which Gabelli increased by 85.21% in transactions occurring from July through September at average prices around $13.75 per share, according to SEC filings. As of Sept. 2, the latest reported transaction, Gabelli’s Gabelli Funds holds 467,036 shares, or 2.83%, of the company, with various other holdings within his other funds totaling more than 5% of the company.
Gabelli started a position in the stock just last quarter:
The stock’s price jumped in June when Medical Action Industries, a disposable medical products company, announced it would be acquired by Owens & Minor, a health care logistics company. Owens & Minor paid $13.80 per share in cash, or $208 million including debt, net of cash, for Medical Action. Medical Action stock closed at $7.07 per share the day before the announcement. The acquiring company was already a major client of Medical Action, representing 45% of its sales for the fiscal year ended March 31, 2014.
In his smaller transaction, Gabelli increased his stake in Tregedar by 2.35% to a total of 4,225,579 shares. A series of transactions took place from July to September at prices ranging from around $19 to $23 per share. Gabelli’s stake represents 13.05% ownership of the company for GAMCO, with smaller holdings within his other funds, according to SEC filings dating Sept. 2.
This is a long-term holding for Gabelli:
Tredegar is a plastic films and aluminum extrusion company with a $700.8 million market cap. Its stock price declined by 26% year to date.
The company second quarter financial results showed an 11.7% year-over-year sales decrease to $146 million and 20.1% year-over-year operating profit decline to $14.96 billion. The declines reflected lower volumes.
Tredegar’s long-term sales and net income history:
The company is trading at close to its one-year low P/B ratio of 1.59 and one-year low P/S ratio of 0.7. Its P/E ratio is at 24.5.
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