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Sydnee Gatewood
Sydnee Gatewood
Articles (2426) 

Mario Gabelli’s Top 5 New Buys for the 3rd Quarter

Guru releases quarterly portfolio

GAMCO Investors leader Mario Gabelli (Trades, Portfolio) added 45 stocks to his portfolio in the third quarter.

Managing a portfolio of 827 stocks, Gabelli and his team utilize fundamental, bottom-up research to identify companies that will generate superior risk-adjusted returns. With $41.3 billion in assets under management as of June 30, Gabelli invests largely in the industrials and consumer cyclical sectors.

The investor’s five largest new purchases for the quarter are Kite Pharma Inc. (NASDAQ:KITE), Orbital ATK Inc. (NYSE:OA), Bankrate Inc. (NYSE:RATE), Micro Focus International PLC (NYSE:MFGP) and Calgon Carbon Corp. (NYSE:CCC).

Kite Pharma

Gabelli purchased 193,350 shares of Kite Pharma for an average price of $138.14 per share, giving it 0.22% portfolio space.

The California-based biopharmaceutical company has a market cap of $10.31 billion; its shares were trading around $179.79 on Friday with a price-book (P/B) ratio of 14.47 and a price-sales (P/S) ratio of 292.34.

The price chart below shows the trend in the stock price year to date.

1958069267.png

GuruFocus ranked Kite’s financial strength 8 of 10 and its profitability and growth 3 of 10. The company does not pay a dividend.

With 0.84% of Kite’s outstanding shares, Andreas Halvorsen (Trades, Portfolio) has the largest position among the gurus. Steven Cohen (Trades, Portfolio), Columbia Wanger (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) are also shareholders.

Orbital ATK

The guru bought 134,530 shares of Orbital for an average price of $109.14 per share, expanding the portfolio 0.11%.

The Virginia-based aerospace and defense company has a market cap of $7.65 billion; its shares were trading around $132.7 on Friday with a price-earnings (P/E) ratio of 27.56, a P/B ratio of 3.93 and a P/S ratio of 1.71.

According to the Peter Lynch chart below, the stock is trading above its fair value.

1509719136395.png

GuruFocus ranked Orbital’s financial strength 5 of 10 and its profitability and growth 5 of 10. The company’s trailing dividend yield is 0.95%, and its forward dividend yield is 0.96%. The dividend payout ratio is 26%.

Of the gurus invested in Orbital, First Eagle Investment (Trades, Portfolio) has the largest holding with 8% of outstanding shares. Barrow, Hanley, Mewhinney & Strauss, NWQ Managers (Trades, Portfolio), Cohen, Keeley Asset Management Corp (Trades, Portfolio), Greenblatt, Jones, George Soros (Trades, Portfolio) and David Dreman (Trades, Portfolio) also own the stock.

Bankrate

Gabelli established a 907,402-share position in Bankrate for an average price of $13.89 per share. The transaction had an impact of 0.08% on the portfolio.

The New York-based financial services company has a market cap of $1.25 billion; its shares were trading around $13.93 on Friday with a forward P/E ratio of 16.42, a P/B ratio of 1.87 and a P/S ratio of 2.59.

Based on the Peter Lynch chart below, the stock appears to be trading above its intrinsic value.

1509719735072.png

GuruFocus ranked Bankrate’s financial strength 5 of 10 and its profitability and growth 5 of 10. The company does not pay a dividend.

Among the five gurus invested in Bankrate, Jim Simons (Trades, Portfolio) has the largest holding with 1.38% of outstanding shares. Greenblatt, Jones and Jeremy Grantham (Trades, Portfolio) are also shareholders.

Micro Focus

The investor purchased 245,572 shares of Micro Focus for an average price of $30.87 per share, giving it 0.05% portfolio space.

The U.K.-based software company has a market cap of $15.36 billion; its shares were trading around $34.65 on Friday with a P/E ratio of 45.77, a P/B ratio of 4.43 and a P/S ratio of 5.35.

According to the Peter Lynch chart below, the stock is trading above its fair value.

1509720478493.png

GuruFocus ranked Micro Focus’ financial strength 5 of 10 and its profitability and growth 8 of 10. The company does not pay a dividend.

With 0.06% of outstanding shares, the Yacktman Fund (Trades, Portfolio) is the company’s largest guru shareholder. Bernard Horn (Trades, Portfolio) also owns the stock.

Calgon Carbon

Having previously sold out of Calgon Carbon in the third quarter of 2014, Gabelli established a new holding of 277,286 shares for an average price of $15.01 per share. The trade had an impact of 0.04% on the portfolio.

The Pennsylvania-based pollution and treatment controls company has a market cap of $1.1 billion; its shares were trading around $21.68 on Friday with a P/E ratio of 144.52, a P/B ratio of 2.78 and a P/S ratio of 1.98.

Based on the Peter Lynch chart below, the stock appears to be trading above its intrinsic value.

1509720989983.png

GuruFocus ranked Calgon’s financial strength 5 of 10 and its profitability and growth 6 of 10. The company’s trailing dividend yield is 0.93% and its forward dividend yield is 0.92%. The payout ratio is 154%.

With 1.87% of outstanding shares, Chuck Royce (Trades, Portfolio) is the company’s largest guru shareholder. Simons and Barrow, Hanley, Mewhinney & Strauss also hold the stock.

During the quarter, Gabelli also established positions in Silver Spring Networks Inc. (NYSE:SSNI), Bob Evans Farms Inc. (NASDAQ:BOBE), Calpine Corp. (NYSE:CPN), DowDuPont Inc. (DWDP), PharMerica Corp. (NYSE:PMC) and many other companies.

Disclosure: I do not own any stocks mentioned.

About the author:

Sydnee Gatewood
I am the editorial director at GuruFocus. I have a BA in journalism and a MA in mass communications from Texas Tech University. I have lived in Texas most of my life, but also have roots in New Mexico and Colorado. Follow me on Twitter! @gurusydneerg

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