Best Ways To Invest For The Rest Of 2014
Marshall Hargrave: Dubbed “Super Mario,” Mario Gabelli founded Gamco Investors over four decades ago. He has quietly grew Gamco into one of the largest investment firms around, overseeing $47 billion in assets.
He often compares himself to billionaire Warren Buffett. On the Gamco site, it outlines the firm’s philosophy as “Graham & Dodd + Warren Buffett = GABELLI.”
In a recent Barron’s interview, Gabelli outlined his top stocks for the second half of 2014. His focus is on strong trends in the market. Here are Gabelli’s best ways to invest for the rest of 2014:
1. Mario likes China’s rising middle class
Gabelli believes that Boeing (NYSE: BA) will be one of the biggest benefactors of the rising middle class in China and India. He notes that with a rise in the middle class, there will also be a rise in the demand for travel.
Boeing has one of the best returns on invested capital in the industry at 20%. Its dividend yield is a decent 2.2%. It has a $7.5 billion left on its buyback plan as of the end of the first quarter. That’s good enough to reduce its shares outstanding by 8%.
Boeing should continue to benefit from a growing demand of commercial airlines, as companies look to upgrade to fuel-efficient aircraft. Boeing saw its net orders up $19 billion last quarter, with its total backlog coming in at $440 billion — putting its backlog at over four times its market cap. That total backlog represents about seven years of production.
2. Mario likes fracking in the shale plays
Gabelli’s best play in the fracking energy space is Weatherford International (NYSE: WFT). This company also happens to be one of Gabelli Funds’ top ten holdings. Weatherford is an equipment and servicer for drilling and production of oil and natural gas wells.