As S&P 500 touches 2000-mark after having maintained a high for six sessions out of seven, it is just reflective of the all-time high being experienced by the US economy during the last 24 hours. While the Dow also rose, it was NASDAQ that created history by touching a new high since March 2000. Mario Gabelli, CEO, Gamco Investors, finds this development as working in favor of the US economy and says that the change in the market is here to stay given that its fundamentals are strong and interest rates have been taken care of. Chemtura Corporation (NYSE:CHMT),Diebold Inc (NYSE:DBD), and Weatherford Intl plc (NYSE:WFT) are the favorite stock picks of Mario Gabelli.
Amongst the suggestions that he makes for investors, the foremost is Chemtura Corporation (NYSE:CHMT) which specializes in developing, manufacturing and marketing chemicals. Boasting of a global presence, the company has joint ventures in several parts of the world and has recently met with success in selling off some of its fixed assets namely manufacturing plants. With its current valuation at $24.60, P/E ratio of 16.85, market cap of $2.23 billion and dividend yield of 7.4%, Chemtura Corporation (NYSE:CHMT) is poised for further growth courtesy of having minimal debts. Therefore, investors who buy its shares now can expect their money to double over the next five years.
Secondly, he has suggested investing in Diebold Inc (NYSE:DBD) which is headed for a major turnover in management and is trying to develop pneumatic and software capabilities. Currently trading at $37.92, it has an intraday market cap at $2.45 billion, forward P/E ratio of 18.32 and a dividend yield of 3.6%. Specialized in providing self-service and security solutions, Diebold Inc (NYSE:DBD) has been on an acquisition spree since 2012 and has consolidated its position not just in North America but also throughout the world. If it pulls through its current plans, the stock is expected to rise by 50-60% over the next 2-3 years.
Also interesting is Weatherford Intl plc (NYSE:WFT) which is presently valued at $22.93 and is expected to rise in the near future courtesy of the management capitalizing on good assets and controlling ones that are liabilities. Basically an oil company, Weatherford Intl plc (NYSE:WFT)’S key statistics include an intraday market-cap of $17.73 billion and a P/E ratio of 13.03%, although the dividend yield is yet to be declared.
So it is how Mario Gabelli puts it – buying good businesses at a reasonable price is bound to yield good returns.
This article has been written by Vinita Basu and edited by Serkan Ünal.