10 Best Conglomerate Stocks to Buy According to Hedge Funds

3) Valmont Industries, Inc. (NYSE:VMI)

Number of Hedge Fund Holders: 33

Valmont Industries, Inc. (NYSE:VMI) operates as a manufacturer of products and services for infrastructure and agriculture markets in the US, Australia, Brazil, and internationally.

With strategic leadership appointments, investments in infrastructure, and positive demand drivers in utility and telecom sectors, Valmont Industries, Inc. (NYSE:VMI) appears to be well-placed to capitalize on long-term demand trends, despite headwinds in the agricultural sector. The company announced the appointment of Deborah Caplan to its Board of Directors.

Caplan’s strong experience in utility markets and talent development should contribute to Valmont Industries, Inc. (NYSE:VMI)’s strategic initiatives focused on market expansion, operational excellence, and organizational development.  The telecom business is expected to drive the next leg of growth. Wireless carriers have returned to more normalized spending levels, which should remain above previous cycles. This hints at steady demand for Valmont Industries, Inc. (NYSE:VMI).

Valmont Industries, Inc. (NYSE:VMI)’s telecom business should be supported by the global expansion of 5G networks. This needs significant investment in infrastructure such as small cells, monopoles, and cell towers, areas where Valmont Industries, Inc. (NYSE:VMI) has strong capabilities. Furthermore, rural broadband initiatives in developed markets, aided by government funding, are expected to contribute to the demand for telecom infrastructure.

Artisan Partners, an investment management company, released its Q4 2023 investor letter. Here is what the fund said:

“Along with Argenx, our top detractors in Q4 were Lattice Semiconductor and Valmont Industries, Inc. (NYSE:VMI). Valmont is a leading designer and manufacturer of engineered metal products. There remains a lot to like about the company. It has exposure to several secular tailwinds (accelerating spending for renewables, grid hardening and renewed irrigation investments to ensure more efficient water usage), a solid balance sheet, strong free cash flow generation and an attractive valuation. However, the company abruptly changed CEOs in July and reported a goodwill impairment in its most recent earnings release. The goodwill impairment was on Prospera, an AI company focused on agriculture that Valmont acquired in 2021, due to significantly slower growth than originally projected. Given the operational missteps and new management team, we have started to harvest the position after giving back most of the strong gains generated in 2021 and 2022.”