Mario Gabelli's Top Picks

By Willie Wade

Although the name Mario Gabelli may not be as widely known as Warren Buffet, this highly successful manager from the Bronx has made a name for himself in the brokerage business. Mario Gabelli runs Gabelli Asset Management, located in Rye, which manages about $20 billion worth of money. In 1997, Gabelli won Morningstar’s U.S.-stock-fund "Manager of the Year" award. Gabelli’s strength comes from his ability to spot takeover candidates. "Takeover targets today include a lot of "B’s": banks, brokers, broadcasters, bell operating companies, and BTU (utility) companies," says Gabelli. He says that he looks for a catalyst that will expedite the growth of a company’s stock. Gabelli says that some of these catalysts have been the fall of the Berlin Wall and a change in accounting rules next year. Another catalyst is the Federal Communications Commission announcement in August that television stations may have two stations in the same market without having it count towards their 35% footprint cap in the U.S. This has already caused a merger between Viacom and CBS. Gabelli says that he expects many more mergers to arise from this. Among other stocks that Gabelli views as possible candidates for mergers are Chris-Craft Industries, BHC, United Television, Granite Broadcasting, Telephone and Data Systems, and Media General. Gabelli sees Chris-Craft Industries, BHC, and United Television being involved in a merger in the future because of the recent announcement of the FCC which deregulated the television industry. Granite Broadcasting, which presently owns three television stations, may also be involved in a merger. Gabelli views Telephone and Data Systems as a profitable investment and sees it in the range of $200 a share in a few years. Media General has, in fact, already made a deal to sell its cable business to Cox.