Gabelli Recommends Graham Holdings, Post Holdings

Mario Gabelli, CEO of Gamco Investors, has made a huge amount of money for his clients over the years through shrewd value investing.

Two of the stocks he likes now are Graham Holdings and Post Holdings.

• Graham Holdings was formerly Washington Post Co. No it includes TV stations, higher education publisher Kaplan, and Cable One, a cable TV and Internet service provider. "Graham is trading for $870 a share [$935 as of Friday]. Shareholders are getting the Kaplan business for free," Gabelli told Barron's. "In addition, the cable asset is going to be monetized."
• The cereal company Post has an 11 percent share of the cereal market, Gabelli says. "There has been some talk of consolidation in this market. I have called [Post CEO] Bill Stiritz a 'cereal acquirer,'" Gabelli said. Post has bought 12 companies for $4.4 billion over the past two years, he said. "The company could have some near-term challenges, but it has good longer-term prospects."

Meanwhile, MarketWatch columnist Philip van Doorn suggests low volatility stocks. He cites the 10 S&P 500 stocks with the lowest volatility over the last three years.

Topping the list is industrial gas giant Praxair, followed by insurance brokerage titan Marsh & McLennan, U.S. Bancorp, the country's largest regional bank, and McDonald's.

The stocks on the list with the lowest forward price-earnings ratio are Wells Fargo, U.S. Bancorp, conglomerate Honeywell International and Union Pacific.

The stocks with the highest dividend yields are McDonald's, PepsiCo, Wells Fargo and U.S. Bancorp.

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• Gabelli Likes Financial Stocks