>
  1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
James Li
James Li
Articles (1445)  | Author's Website |

Gabelli Funds Divests 4 Positions in 1st Quarter

Guru reports quarterly portfolio

Mario Gabelli (Trades, Portfolio), founder of GAMCO Investors Inc. (NYSE:GBL), eliminated his positions in four companies during first-quarter 2017: Harman International Industries Inc. (HAR), Federal-Mogul Holdings Corp. (NASDAQ:FDML), Media General Inc. (NYSE:MEG) and Clarcor Inc. (NYSE:CLC).

Harman International Industries

Gabelli sold his 851,325-share holding in Harman International at an average price of $111.09, trimming 0.60% of his portfolio. The guru gained 25% on the stock based on GuruFocus estimates.

The audio manufacturing company has a profitability rank of 7, which suggests good growth potential. Harman International has a moderately strong Piotroski F-score of 6, driven by increasing current ratios and gross margins throughout 2016. Additionally, the company’s operating margins and returns on equity are currently near a 10-year high and outperform 71% of competitors.

1053537269.png

Despite good financial strength and profitability, Harman’s share price of $111.50 is near a 52-week high and trades roughly 29.2% higher than its median price-sales (P/S) value. The company also has a P/S ratio near a one-year high and a dividend yield near a one-year low.

1575426201.png

Federal-Mogul Holdings

The GAMCO Investors CEO axed his stake in Federal-Mogul Holdings, selling 8,154,142 shares at an average price of $9.99. Gabelli trimmed 0.53% of his portfolio with this transaction.

Federal-Mogul Holdings, a supplier of vehicle safety products, exhibits poor financial strength and profitability. Although the company has a Piotroski F-score of 8, Federal-Mogul has weak interest coverage and Altman Z-scores, which imply high bankruptcy risk. Additionally, Federal-Mogul’s Z-scores underperformed the industry median during the past five years.

1317092992.png

Federal-Mogul has three severe warning signs, including contracting gross margins and per-share revenue. Based on comparative analysis data, Federal-Mogul is losing competitive power to companies like Gentherm Inc. (NASDAQ:THRM) and Dorman Products Inc. (NASDAQ:DORM).

586337851.png

241323718.png

Activist investor Carl Icahn (Trades, Portfolio) owns over 155 million shares of Federal-Mogul even though the company has poor growth and value potential. (Federal-Mogul is a classic “out-of-favor” company that “nobody else wants.”)

Media General

Gabelli sold his remaining 3,825,450 shares of Media General at an average price of $18.78. The guru knocked off 0.46% of his portfolio with the transaction.

Media General, one of the largest U.S. multimedia companies, exhibits poor financial strength. The company has moderately severe financial distress: its cash-to-debt ratio, interest coverage and Altman Z-score are all in distress zones.

1459178342.png

Despite having a profitability rank of 7, Media General has negative ROE and ROA, suggesting low growth potential. The company’s margins and returns underperform over 70% of competitors.

2138670151.png

Clarcor

The Gabelli Funds manager sold his 759,353 share stake in Clarcor at an average price of $82.78. Gabelli gained 35% on the stock based on GuruFocus estimates.

Clarcor has a financial strength rank of 7 and profitability rank of 8, both implying a strong business operation. The company also has a GuruFocus business predictability rank of four stars.

883812442.png

Although the company meets Warren Buffett (Trades, Portfolio)’s criteria of a predictable business with competitive advantages, Clarcor is significantly overvalued. The company’s share price, price-earnings (P/E) ratio, P/S ratio and price-book (P/B) ratio are all near 10-year highs. Additionally, Clarcor’s share price is near its 10-year maximum P/S valuation.

612673930.png

1525816589.png

1748534539.png

See also

You can view the latest guru stock picks by clicking “Latest Guru Picks” underneath the “Gurus” tab. Premium members can view portfolio information on over 150 gurus, including the aggregated portfolio of gurus.

Disclosure: I do not have positions in the stocks mentioned in the article.

Start a free seven-day trial of Premium Membership to GuruFocus.

About the author:

James Li
I am an editorial researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

Visit James Li's Website


Rating: 0.0/5 (0 votes)

Comments

Please leave your comment:



Performances of the stocks mentioned by James Li


User Generated Screeners


pjmason14Momentum
pascal.van.garsseHigh FCF-M2
kosalmmuse6
kosalmmuseBest one1
DBrizanall 2019Feb26
kosalmmuseBest one
DBrizanall 2019Feb25
kosalmmuseNice
kosalmmusehan
MsDale*52-Week Low
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)