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TheStreet Open House

Mario Gabelli's Stake In Superior Industries A Positive Sign

Stocks in this article: F GM NSANY TM VLKAY

Mario Gabelli is the founder and CEO of Gabelli Asset Management Company Investors GAMCO Investors, a $43 billion global investment management firm. Mario Gabelli is a strong adherent to value investing principles and emphasizes fundamental bottom-up research in order to generate superior risk-adjusted returns. His Private Market Value PMV with a Catalyst TM methodology is defined as the price an informed industrial buyer would be likely to pay to acquire the business. He focuses on valuing companies based on its cash flow instead of a standard focus on earnings. Mario Gabelli is also well-known for identifying companies that might be candidates for a buyout, which possess specific characteristics such as a large amount of cash on balance sheet, for example.

GAMCO disclosed in a recent SEC filing that it owns a 13.22% stake in Superior Industries, which it’s owned for some time already. Superior Industries is the largest manufacturer of aluminum wheels for passenger cars and light-duty vehicles in North America. From its five plants in both the U.S. and Mexico, the company supplies aluminum wheels to the original equipment market. Major customers include Ford Motor Company (F - Get Report), General Motors Company (GM - Get Report), Chrysler, Bayerische Motoren Werke AG FRA:BMW, Mitsubishi Corp TYO:8058, Nissan Motor Co., Ltd. OTCMKTS:NSANY, Subaru, Toyota Motor Corporation (TM - Get Report) TYO:7203 and Volkswagen AG OTCMKTS:VLKAY (VOW) FRA:VOW.

The company has a market capitalization of $548 million, cash and equivalents of $186 million, has no debt, and is valued at approximately x5 EV/EBITDA multiple. Part of the cash holding is earmarked for the building of a new manufacturing plant in Mexico, which will increase the manufacturing capacity by about 20%. In March 2013, Superior Industries’ board approved a $30 million stock repurchase program, but as of the latest quarter no buybacks were executed so far.

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