Three companies look increasingly attractive for takeover bids, Gabelli Funds CEO and Chairman Mario Gabelli said Tuesday.
On CNBC's "Fast Money," he argued that Navistar, Hillshire Brands and Post hold significant value that isn't being reflected in their stock prices.
Gabelli expanded on his view of Navistar, which counts activist investor Carl Icahn as a board member.
"Navistar is simple. It tracks its demand from Class A trucks, ties itself to GDP and they go through cycles," he said. "They made a mistake, and we did not figure out that they did not have a backup plan early enough."
Gabelli alluded to a Navistar engine that didn't work under U.S. Environmental Protection Agency regulations.
A "wildcard" was Fiat's Sergio Marchionne plans for its subsidiaries.
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"I think at some point once they figure out what to do with Chrysler that they may want to consolidate that, and if they don't, Navistar will still come in with $15 billion in revenues in a couple of years and $1 billion of EBITDA, and I think the stock with a market cap of $2½ billion is worth putting a few bets down," he said. "Now, short-term you've got some potholes."
Next on Gabelli's list of potential takeover targets to buy was Hilshire Brands.
