Why Did Billionaire Mario Gabelli's Company Buy Diebold, Responsys, and ViroPharma?

We small investors can get promising ideas from big investors.

Feb 14, 2014 at 5:15PM

The latest 13F season is commencing, when many money managers issue required reports on their holdings. It can be worthwhile to pay attention, as you might get an investment idea or two by seeing what some major investors have been buying and selling.

For example, consider GAMCO Investors (NYSE:GBL), the diversified asset manager and financial services company headed by well-known value investor Mario Gabelli. According to its recently released 13F statement, the company upped its position in Diebold Incorporated (NYSE:DBD) by 21%, while adding new positions in Responsys (NASDAQ:MKTG) and ViroPharma Incorporated (NASDAQ:VPHM).

Diebold specializes in machinery such as ATMs, check-cashing machines, safes, and pneumatic tube systems, and also offers software. Its stock surged nearly 10% yesterday, on fourth-quarter results that featured estimate-topping revenue and earnings a bit below expectations. Revenue was down from year-ago levels, but management expects increases. Diebold stock yields 3.4%, and the company has a very long record of consecutive dividend increases, though recent increases have been getting smaller. Among hundreds of holdings, GAMCO's Diebold position was its 28th largest at the end of the quarter, valued at more than $146 million.

Responsys offers software that focuses on relationship-based marketing, among other things. Bulls see growing corporate budgets for targeted marketing, and like the fact that unlike some rivals, Responsys is actually profitable. Its client list is growing, with management noting that "In the second quarter, we signed many new North American clients, including iconic fashion brand J. Crew; jewelry and watchmaker, Swiss Watch; and next-generation event technology website, Eventbrite." Responsys recently bought Push IO, a major provider of push notifications that are delivered mainly over mobile devices now, but could spread to websites, gaming devices, and beyond. This matters, because right now push notifications have stronger open and click-through rates than emails. Meanwhile, there's murmuring that a bigger entity might want to gobble up Responsys itself. Valued at nearly $11 million, GAMCO's position in Responsys is far from its largest.

ViroPharma and its key product Cinryze, which treats the rare condition of hereditary angioedema, have been acquired by Shire plc (NASDAQ:SHPG). With a $29 billion market cap and a 0.10% dividend, Shire is aiming to deliver growth more than income. Shire expects Cinryze sales to account for 40% of its revenue. But overall, the acquisition reflects how attractive orphan drugs can be, and it's fueling speculation about other possible buyouts. Shire's fourth-quarter was strong, but the company did experience a setback with poor clinical trial results for its major depressive disorder drug Vyvance. With more than $33.6 million worth of shares, ViroPharma was GAMCO's 155th-largest holding in the quarter.

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Selena Maranjian, whom you can follow on Twitterhas no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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