Gabelli: Mergers Are Back—and I'm Buying the Targets

Margo D. Beller|Special to CNBC.com
Tuesday, 5 Apr 2011 | 12:27 PM ET

The merger train has left the station, and it’s going to go run for another one to three years, Mario Gabelli, chairman and chief investment officer of GAMCO Investors,told CNBC Tuesday.

With the economy accelerating, Gabelli, whose fund has had annualized returns of 16.3 percent since inception, expects the stock market to end the year with gains of 5 percent-10 percent.

Gabelli: Master of the Market
Mario Gabelli, CEO & CIO, GAMCO Investors, Inc., this year's Money Manager of the Year (Institutional Investor) discusses his quest to buy companies that are selling at a discount from private market value and look for a catalyst. He also discusses his economic outlook and expectations for the market.

Gabelli sees merger activity picking up in technology, telecommunications, energy and consumer discretionary companies.

"Honeywell, ITT, Fortune Brands are firms that I like," he said.

He is also expecting Millicom International Global Cellular SA to be the next telecom firm snapped up in the wake of the planned merger of AT&T and T-Mobile.

Gabelli's firm owns Millicom shares.

"I’m not buying the ones doing the takeovers, I’m buying the ones that are the targets of the lovemaking," he said.

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