Mario Gabelli Betting Big On This Water Industry Stock

Mario Gabelli, founder and CEO of GAMCO Investors Inc. and arguable one of the best value investor on the Street is bullish on a new company from an area that few investors have in their radar - water.

Gabelli was on CNBC Tuesday to explain why he is bullish on companies related to water and his top-pick from the sector - Xylem Inc XYL.

Water: The Focus

"It's water and it's not new, but it's an area that we have identified and we have a core competency and for the last probably 10 or 12 years," Gabelli began. "Not because I saw that, remember that water [world] or 'water, water everywhere' as a story, but essentially we consume 90 percent or 80 percent of our water for agriculture, 10 percent for industrials and the rest of it we consume. But we are sensitive about it because we are running out of it."

Big Tailwind For Demand

Gabelli revealed his top pick in the sector Xylem, saying, "It was a spin-off from ITT Corp ITT. IIT over the last, since I started following and with Geneen (Harold Geneen, former CEO OF ITT) in the 60s they have a culture of spinning of companies consistently and constantly."

"Xylem has a new CEO in last year and a half Pat Decker and the CFO [...] left yesterday to go to Polaris Industries Inc. PII and the company will do a $1.80. There is about a 180 million shares. Stock's XYL is the symbol, somewhere around $36-37. And, I think, over the next 3 years this company has a big tailwind of demand," Gabelli concluded.