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 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.