Stock market superstar Mario Gabelli explains why he is taking a look at Davide Campari-Milano in a CNBC interview today. We earlier posted one segment from the interview, which can be found here. The entire (rest of the) interview can be found below.
Mario Gabelli Favorite Stocks: Full CNBC Interview video and excerpts
Mario Gabelli video excerpts and transcript CNBC July 9th 2013
Gabelli’s Favorite Bank Stocks
Mario Gabelli, Gabelli Funds CEO, provides his play on the banking sector, including trades Legg Mason, PNC and M&T Bank.
Gabelli’s Three Takeover Targets
Short-term takeover targets have some “potholes,” says Mario Gabelli of the Gabelli Funds, providing his play on Hillshire Farm, Post and Navistar. And a technical look at what the charts are indicating about the markets, with Stephen Suttmeier, Bank of America.
welcome back. get you caught up quickly what the market’s doing. pretty picture on wall street today. s & p 500 right now at the highs of the day. we’ve taken out 1650. 1652 is where we currently sit. only about 100 points away on the dow of its record closing high as well this. rally continues to march forward. tranny’s up 2.5%. very notable. transport’s important. 1650 a key level investors are looking at. one of your key is betting on companies before they become takeover targets. what kind of names are we talk about here. i know one you like, carl icahn is in that being navastar. i started following them when they were international harvester. navastar it tracks the man from s.a. trucks. ties itself to gdp and they go through cycles. they made a mistake and we did not figure out they did not have ®a backup plan early enough where they came in with an engine that didn’t work on the epa rules. stock’s $29. 80 million shares. is a poison pill t expires. carl is on the board. i’m buying that stock. a wild card here is sergio marcioni put together fiat industrial. they’ll have a wonderful industrial base. power train. and scott, i think that at some point after they figure out what to do with chrysler they may want to consolidate that. if they don’t, navastar will still come in with 15 billion of revenues in a couple of years and $1 billion ebitda. i think the stock with the market cap of $2.5 billion is worth putting a few bets down.now short term you’ve got some potholes. hillshire brands. about five, seven years ago, brenda barnes was running sarah lee. buying back stock. we took a look at it. we liked single serve company. they have what they call now d.e. master blend that’s being taken over. hillshire was a subset of that. so hot dogs, sausages,my deen in the morning. hillshire meats. i thought smith food would back into owning this. i don’t know if they something else interested in, don’t know if the deal will go through. but i think hillshire short term an a little issue with regards to pork, but i’m buying some right here at 33. three to five years out either they turn it around an they are turning it around, doing a great job in marketing and spend and great brand promotions. the other one that was also a spinoff when rollcorp was taken over by canagra. that was a deal where the buyer synergistically it helped lift the stock. they spun off a company called post. cereal company around in 1890. i don’t have to worry about when the next netflix will be here. i think most of us know of post. probably have some of the boxes in our cupboard. i also like to buy a company that is a gifted ceo. now he’s the ceo at post. he’s done a couple of deals and he’s getting some wampum in the sense of convertible preferred. i bet he’s going to put together a very interesting company. small cap stock. 35 million shares. 1.5 billion. that’s where you want to forage. and it’s thick ice when you’re walking on a high. air pock nets this company. navastar i’ll take the other side. good. i need help. if you really want help, simon will take the other side. i’m going to take it for now. cummins engine. they’re reselling them. they’ve lost a part of their franchise. damaged themselves with the network. end buyer who want more reliable trucks. icahn if he does win dell he’s balance sheet’s been tapped so he’s got to go out and take another one over. i don’t see that happening with icahn. so why so optimistic on navastar? i started following cyclical companies. you buy them when their earnings are peaking you pay depressed multiples. when earnings are depressed you pay peak multiples. so what happens in the cycle? you’re right, and that is that when i started following the truck companies, even pack car they would assemble the truck from cummins because the trucker specifies the engine. the dealer’s not uncomfortable with this. they’ve got a credibility. but you go through cycles where this happens to every large company. at some point in time. i think the new ceo is doing a better job. putting in 13 liter engine’s working. the one that they have now is with cummins. over the next 3 to 5 years when the cycle turns i think they’ll get their share of the heavy duty truck market. the bus market will come back when municipals start buying again. is there an air pocket i’m missing with regards to the balance sheet short term where they may have financial issue. carl icahn, why does he wa to care about trucking? i first met carl when i was buying acf industries and he took over the company. i met him prior to that. ways following acf because they made carburetors and they made rail cars and he still owns it. we’ve been following the market. trains to computers. we’ve got a pretty good market we’ve been following as you know today. dow is less than about 100 points or so away from its record close. want to know what the technicals are telling us right now. there’s the dow, 15, 305. let’s check the charts with steve suttmyer bank of america merrill lynch. 1650, getting above that the significance is what? well, there’s a level of resistance right around 1650 to 1665 on the s & p 500. and if you look at the improvement, the breadth indicators have shown the improvement in our volume intensity model proprietary volume indicator supports the case for the s & p to move beyond that resist tan, trend back up towards the may highs near 1674 to 1687. and perhaps even move up into the 1700 handle once again. in terms of support, it appears the s & p is building some support right around 1611 to 1597. the market pattern is looking quite constructive here based on the price action. also based on the firmness of market breadth indicators. steve, josh brown.