Billionaire value investor turns to agriculture and aerospace for investing


Finding value plays in a market plagued by inflation, rising commodity prices and fears of a recession is difficult to say the least. Due to interest rate hikes by the Federal Reserve (Fed), various sectors have seen a pullback in stock prices, which could be a good thing for value investors looking to grab a bargain. .

Similarly, the war in Ukraine and the energy crisis in Europe have caused market participants to focus on manufacturing sectors and energy companies, which have seen strong growth in 2022.

On the other hand, there are other additional interesting sectors to examine, according to Mario Gabelli, president and CEO of Gabelli Asset Management, who joined CNBC’s Squawk Box on September 9 to discuss where he sees additional investment opportunities.

Notably, the billionaire value investor highlighted the agriculture and aerospace sectors as investment ideas due to the fact that there are companies whose shares are expected to rise in the short and long term.

Agriculture and aerospace

Gabelli pointed out that there is a lot of confusion over the new 15% tax proposal indicating that the agricultural sector could benefit from a $535 billion government stimulus, among other things.

“We like companies like Deere (NYSE:DE), but we particularly like Case New Holland (NYSE:CNHI) right now, there’s 1.3 million shares, the stock is around $12; we believe they can earn $1.5 to $2 in 12 months. Deere is going to make $22, more or less, and that stock is $305, so it’s an area that we love.

He also added:

“Two companies in the aerospace and defense industry. One is Aerojet (NYSE:AJRD), the Federal Trade Commission in early February, based on the data, they had turned down Lockheed Martin (NYSE:LMT), and Lockheed walked away, it was a $51 deal . The stock is at $44; we just bought 800,000 more shares.

Hypersonics and ground defense

Hypersonic weaponry seems to be the buzzword in the defense industry, as Gabelli also mentions that this type of weaponry is also what they pay attention to, as Lockheed recently conducted a successful test.

The second company in this market segment mentioned by Gabelli is Crane Holdings (NYSE: CR), which is seeking to separate into two separate entities and, over the next few years, will earn between $6 and $7 per share, according to Gabelli.

It seems billionaire value investors are looking to the two hottest sectors to find long-term stocks. Food and defense are the ones that make a lot of sense in a world plagued by fears of war and food shortages.

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Featured image via CNBC YouTube

Disclaimer: The content of this site should not be considered investment advice. The investment is speculative. When you invest, your capital is at risk.


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