(Guru Focus) Billionaire investor Mario Gabelli, leader of New York-based GAMCO Investors, disclosed his third-quarter portfolio earlier this week.
With the goal of generating long-term capital appreciation, the renowned guru and his team search for opportunities among undervalued stocks that have a catalyst for growth.
Keeping these criteria in mind, Gabelli entered 55 new positions, sold out of 43 holdings and added to or trimmed a slew of other investments during the quarter.
El Paso Electric
Gabelli sold his 855,812 remaining shares of El Paso Electric, impacting the equity portfolio by -0.65%. The stock traded for an average price of $67.46 per share during the quarter.
GuruFocus estimates he gained 29,197.68% on the investment.
The Texas-based utility company, which provides electricity to West Texas and southern New Mexico, has a $2.79 billion market cap; its shares were trading around $68.40 on Tuesday with a price-earnings ratio of 34.2, a price-book ratio of 2.39 and a price-sales ratio of 3.29, which GuruFocus notes are all approaching 10-year highs.
With an impact of -0.21% on the equity portfolio, the guru trimmed his position in Honeywell by 20.82%, selling 126,504 shares. Shares traded for an average price of $157.6 each during the quarter.
He now holds 481,030 shares total, which account for 0.88% of the equity portfolio. GuruFocus data shows he has held the stock for over a decade.
The industrial conglomerate, which is headquartered in Charlotte, North Carolina and produces highly engineered products like turbine propulsion engines, auxiliary power units and navigation systems, has a market cap of $139.98 billion; its shares were trading around $200.19 on Tuesday with a price-earnings ratio of 28.62, a price-book ratio of 7.74 and a price-sales ratio of 4.29.
Continuing his selling trend, the investor curbed the Sony stake by 9.66%, or 234,437 shares. The trade had an impact of -0.18% on the equity portfolio. During the quarter, the stock traded for an average per-share price of $77.65.
Gabelli now holds 2.19 million shares of the company, representing 1.87% of the equity portfolio. According to GuruFocus, he has gained 258.81% on the investment so far.
The Japanese company, which manufactures a variety of consumer electronics, has a $106.1 billion market cap; its shares were trading around $86.18 on Tuesday with a price-earnings ratio of 12.24, a price-book ratio of 2.24 and a price-sales ratio of 1.39.
Impacting the equity portfolio by -0.14%, Gabelli reduced the Quidel holding by 15.64%, selling 54,600 shares. During the quarter, the stock traded for an average price of $222.17 per share.
He now holds 294,500 shares in total, which make up 0.72% of the equity portfolio. GuruFocus says the guru has gained 648.52% on the investment so far.
The San Diego-based manufacturer of diagnostic testing products has a market cap of $8.41 billion; its shares were trading around $200.47 on Tuesday with a price-earnings ratio of 23.48, a price-book ratio of 9.89 and a price-sales ratio of 8.68.
In his largest purchase of the quarter, Gabelli picked up 332,667 shares of Momenta Pharmaceuticals, allocating 0.19% of the equity portfolio to the position. During the quarter, shares traded for an average price of $41.42 each.
Headquartered in Cambridge, Massachusetts, the biotech company, which focuses on developing novel therapies to treat rare, immune-mediated diseases, has a $6.24 billion market cap; its shares were trading around $52.48 on Tuesday with a price-book ratio of 15.75 and a price-sales ratio of 189.46, which GuruFocus noted are all nearing 10-year highs.
Additional trades and portfolio performance
Other new holdings Gabelli established during the quarter included PMV Consumer Acquisition Corp., Rosetta Stone Inc., Immunomedics Inc., Aimmune Therapeutics Inc. and Varian Medical Systems Inc.
The guru's $8.79 billion equity portfolio, which is composed of 839 stocks, is most heavily invested in the industrials sector with a weight of 31.15%, followed by smaller positions in the communication services and consumer cyclical spaces.
According to GuruFocus data, the Gabelli Assset Fund Class AAA returned 22.43%, underperforming the S&P 500 Index's return of 31.48%.