Three companies look increasingly attractive for takeover bids, Gabelli Funds CEO and Chairman Mario Gabelli said Tuesday.
"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.