After some summer unrest, the U.S. equity market is once again hitting fresh peaks, prompting many investors to lament that there are no good values left. Enter Mario Gabelli, the billionaire investor who has made a career out of spotting attractive opportunities the rest of Wall Street is overlooking. Forbes asked Gabelli for his best ideas; here’s what he came up with.  Gabelli says this maker of ATMs is in the early stages of a turnaround with a “terrific service team” led by CEO Andy Mattes, who is focusing on software capabilities like electronic security. “Diebold stock is at $36*,” says Gabelli, “if [Mattes] is successful, we expect to see an increase of 50% over the next three years.”  In contrast to Diebold, Gabelli calls specialty chemicals company Chemtura a late-stage turnaround, set to complete the sale of its agro-solutions business by mid-October. He expects CEO Craig Rogerson to use the nearly $1 billion in proceeds to eliminate debt ($800 million as of June 30 according to FactSet) and further shrink the company’s outstanding share count by repurchasing stock.  “A combination of improving earnings before interest, taxes, depreciation and amortization (EBITDA) and the reduced number of shares would result in a 50% increase in the public price two years out,” Gabelli predicts.  This oil services company’s management-led turnaround should emphasize its focus on fracking. “The stock has moved up nicely, but it is still in the process of reducing debt by shedding non-core assets,” Gabelli says.  Forget all the headlines around Rupert Murdoch’s brief pursuit of Time Warner Time Warner, Gabelli thinks the media mogul’s response after being stiffed by his target is right on point. “This company has committed to using its financial flexibility and buying back stock,” he says, some $6 billion worth in the next 12 months instead of loading up on debt to buy Time Warner.  And, Gabelli says, Fox has plenty of earnings power of its own over the next few years “as Fox Sports complements its Fox News franchise.”  Another energy play rounds out Gabelli’s picks. He likes this one because management is focused on “monetizing underlying assets in the Marcellus Field along with its pipeline business, perhaps including a spinoff of the utility business.”  *The stock prices quoted by Gabelli in this story are as of 8/14/14.
Mario Gabelli has been spotting great stock buys for decades. These days he likes Diebold, Weatherford and a bet on Rupert Murdoch.