We recently published a list of 10 Best Stocks to Buy According to Billionaire Mario Gabelli. In this article, we are going to take a look at where AMETEK, Inc. (NYSE:AME) stands against other stocks to buy according to billionaire Mario Gabelli.

GAMCO Investors, formerly known as Gabelli Asset Management Company, is an investment firm with its headquarters in Rye, New York. The company has expertise in providing investment advice and brokerage services to mutual funds, institutional clients, and select investors. It was founded and is majority-owned by Mario Gabelli. Mr. Gabelli is the Chairman and Chief Executive Officer of GAMCO Investors, Inc.

GAMCO Investors’ Investment Philosophy

With respect to value, the company’s investment approach revolves around utilizing fundamental, bottom-up research to spot securities selling below their intrinsic value. Furthermore, the investment firm seeks to identify mispriced companies possessing healthy businesses and the presence of a catalyst that will surface value. The firm’s investment teams use a broad universe in the benchmark-agnostic approach to cover all sectors of the market and check evolving themes and value-based opportunities.

Investment Themes For 2025

The firm’s portfolio managers have shared themes that they believe will shape markets in 2025. As per Co-CIOs Chris Marangi and Kevin Dreyer, a resurgence of M&A activity will take place.  Industry consolidation is one of the favorite catalysts because it could immediately surface PMV (Private Market Value) either as a target or as a company similarly situated to a target.  Notably, increased rates and activist federal agencies depressed M&A activity over the previous 2 years. The new regime in Washington is almost certain to fuel deal activity.

The AI investment returns were largely accrued to companies that are involved in the buildout of computing infrastructure. As a result, investment returns for companies who are creating end user-facing products and services using AI technology have lagged, says John Belton, Co-Portfolio Manager of the Gabelli Growth Innovators ETF (GGRW). This dynamic is expected to reverse over the coming years with GenAI migrating from research labs to user applications and entering a new phase of commercialization.  Next, the rise in geopolitical instability continues to drive more NATO members to prioritize defense and military investments, leading to higher defense budgets throughout Europe and the U.S., says Tony Bancroft, Portfolio Manager of the Gabelli Commercial Aerospace and Defense ETF (GCAD).

Tim Winter, Co-Portfolio Manager of the Gabelli Utilities Fund (GABUX), believes that infrastructure improvements can make utilities attractive. Finally, Chris Mancini, who is the Co-Portfolio Manager of the Gabelli Gold Fund (GOLDX), believes that gold continues to offer a good opportunity for investors who are looking for a haven during uncertain times.

Amidst such trends, let us now have a look at the 10 Best Stocks to Buy According to Billionaire Mario Gabelli.

Our Methodology

To make the list of 10 Best Stocks to Buy According to Billionaire Mario Gabelli, we selected the top 10 stocks in GAMCO Investors’ portfolio as of its Q4 2024 13F filing. We settled on the hedge fund’s 10 biggest holdings. Finally, we ranked the stocks in ascending order based on the value of GAMCO Investors, Inc.’s equity stakes. Additionally, we have mentioned the hedge fund sentiment around each stock, as of Q4 2024.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

A close-up of a technician's hands making precision adjustments to a specialty industrial machine.

AMETEK, Inc. (NYSE:AME)

Number of Hedge Fund Holders: 51

GAMCO Investors’ Stake: $117.7 million

AMETEK, Inc. (NYSE:AME) is engaged in manufacturing and selling electronic instruments (EIG) and electromechanical (EMG) devices in the US and internationally. The company delivered healthy results in Q4, with outstanding operating performance fueling strong core margin expansion, record earnings as well as healthy cash flow growth. AMETEK, Inc. (NYSE:AME)’s operational flexibility and disciplined execution enabled it to navigate a continued uncertain macroeconomic environment. The company remains well-placed as it enters 2025, considering the leading positions throughout a diverse set of attractive markets as well as significant balance sheet capacity to deploy on strategic acquisitions.

Notably, The AMETEK Growth Model integrates the 4 growth strategies i.e., operational excellence, technology innovation, global and market expansion, and strategic acquisitions, with a disciplined emphasis on cash generation and capital deployment. Furthermore, during the Q4 2024 earnings call, AMETEK, Inc. (NYSE:AME)’s management expressed optimism regarding the new product pipeline, which it expects to pay off.  For 2025, the company anticipates overall sales to be up low single digits on a percentage basis as compared to 2024. It expects adjusted earnings per diluted share to be between $7.02 – $7.18, reflecting an increase of 3% – 5% over the comparable basis for 2024. The company remains confident about its growth model and market position.

ClearBridge Investments, an investment management company, released its Q3 2024 investor letter. Here is what the fund said:

“AMETEK, Inc. (NYSE:AME), in the industrials sector, makes electronic instruments and electromechanical devices. The company’s position as a supplier of high-quality instruments to “cannot fail” industries, such as aerospace applications, health care equipment and marine instrumentation, has made it the dominant player in several of these high-value, but niche areas. Additionally, the company has a strong track record of successfully integrating and raising the margin profile of acquired businesses. Subjected to the same destocking malaise weighing on the broader industrials sector, we were able to capitalize on the company trading at cycle lows to establish a position in this best-in-class industrials business.”

Overall, AME ranks 9th on our list of best stocks to buy according to billionaire Mario Gabelli. While we acknowledge the potential of AME as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than AME but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires

Disclosure: None. This article is originally published at Insider Monkey.