1) Linde plc (NASDAQ:LIN)
Number of Hedge Fund Holders: 63
Based in Woking, the United Kingdom, Linde plc (NASDAQ:LIN) carries out operations as an industrial gas company in the Americas, Europe, the Middle East, Africa, Asia, and the South Pacific.
Linde plc (NASDAQ:LIN)’s growth trajectory is expected to be aided by its competitive advantages, such as switching costs and intangible assets. A critical driver of the company’s future growth prospects is its ambitious clean hydrogen strategy. Linde plc (NASDAQ:LIN) agreed to supply clean hydrogen to Dow Inc’s ‘Path2Zero’ project in Alberta, Canada. This investment has placed Linde plc (NASDAQ:LIN) as a front-runner in the clean hydrogen market and was aligned with broader trends supporting higher demand for Canadian natural gas.
The use of ATR technology, which needs natural gas as feedstock, should contribute positively to the long-term demand for natural gas in the region. Wall Street analysts opine that the clean hydrogen market has an optimistic outlook, which stems from the industries and governments seeking to reduce carbon emissions and transition to more sustainable energy sources.
Linde plc (NASDAQ:LIN)’s large-scale projects, like the clean hydrogen production site in Canada, exhibit its focus on becoming a leader in this emerging market. With the expansion of the hydrogen economy, the company is expected to benefit from elevated demand for its production technologies, distribution infrastructure, and end-use applications throughout industries, such as transportation, power generation, and industrial processes.
Analysts at Bank of America upped their price target on the shares of Linde plc (NASDAQ:LIN) from $495.00 to $516.00, giving a “Buy” rating on 5th August. Aristotle Atlantic Partners, LLC, an investment advisor, released its third quarter 2024 investor letter. Here is what the fund said:
“Linde plc (NASDAQ:LIN) is the largest industrial gas company worldwide and a major technological innovator in the industry. The company produces atmospheric gases like oxygen, nitrogen, argon, and rare gases through air separation processes, with cryogenic air separation being the most prevalent. They also have technologies to produce blue and green hydrogen, which are considered clean energy. Linde uses three basic distribution methods for industrial gases: on-site or tonnage, merchant or bulk liquid, and packaged or cylinder gases. These methods are often integrated, with products from all three supply modes coming from the same plant. The method of supply is determined by the lowest cost means of meeting the customer’s needs.
Linde holds a leading market share in a consolidated industry, with expected revenues of approximately $34 billion in 2024. The company has consistently grown its earnings throughout economic cycles due to its exposure to both cyclical end markets and is secured by long-term supply agreements of at least three years, providing defensive characteristics to its operating model. We see a robust backlog and pipeline driven by attractive growth end markets and significant decarbonization opportunities with operational discipline from management.”
While we acknowledge the potential of LIN as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than LIN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
