Gabelli Funds Divests 4 Positions in 1st Quarter

Guru reports quarterly portfolio

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May 05, 2017
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Mario Gabelli (Trades, Portfolio), founder of GAMCO Investors Inc. (GBL, Financial), eliminated his positions in four companies during first-quarter 2017: Harman International Industries Inc. (HAR, Financial), Federal-Mogul Holdings Corp. (FDML, Financial), Media General Inc. (MEG, Financial) and Clarcor Inc. (CLC, Financial).

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.


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.


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.


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. (

THRM, Financial) and Dorman Products Inc. (DORM, Financial).



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.


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.



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.


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.




See also

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

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