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Mario Gabelli: Here Are Two Stocks That Will Double

Tuesday, 12 Feb 2013 | 1:57 PM ET
Gabelli: These Stocks Will Double
Mario Gabelli, Gamco Investors chairman, CEO & CIO, reveals the names of two companies that he believes are set to soar.

Value investor Mario Gabelli told CNBC on Tuesday that he expects two stocks in particular to double in value.

"One of them is a company that just announced last night their results, GenCorp," the chairman, CEO and CIO of Gamco Investors said in a "Squawk Box" interview.

(Read More: 5 Stocks Poised to Pop on Bullish Earnings)

GenCorp is a small-cap stock with a market capitalization of nearly $700 million. It makes aerospace and defense products and systems and has a real estate segment. The company made $0.05 diluted income per share in the fourth quarter versus $0.01 a year ago. Revenue increased 18 percent to $298 million.

To make his case, Gabelli pointed to GenCorp's $550 million deal to buy Pratt & Whitney Rocketdyne from United Technologies. "They bought Rocketdyne and they're closing on that. And that business — the basic manufacturing business, which has short term hiccups — will earn about 70 cents in three or four years."

GenCorp also has "significant acreage" in the Sacramento, Calif.-area and "real estate is booming," he said.

(Read More: CNBC's Stock Blog)

The second stock that Gabelli expects to double is Legg Mason.

On Monday, Gabelli announced that his firm increased its stake in the global asset management company to 5 percent.

A major reason for his faith in shares of Legg Mason: "[They're] buying back their stock. They had 164 million shares outstanding, they're down to 128," giving it about a $3.6 billion market cap. "They [also] announced that two thirds of their cash flow is going to buy back stock."

Gabelli added, "They're in the investment business, great cash generator, and they're solving a lot of their issues."

By CNBC's Matthew J. Belvedere; Follow him on Twitter @Matt_SquawkCNBC

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