1. Ferguson Enterprises Inc. (NYSE:FERG)
Number of Hedge Fund Holders: 72
Ferguson Enterprises Inc. (NYSE:FERG) is a leading distributor of plumbing, HVAC, and industrial products in the United States and Canada. The company supplies a broad range of materials, including plumbing fixtures, pipes, valves, fittings, appliances, and lighting, catering to residential, commercial, and industrial markets. FERG operates an extensive network of branches, regional distribution centers, and master distribution centers, ensuring efficient product delivery. In the industrial sector, it provides customized pipes, valves and fitting solutions, in-house project management, and contracting services to optimize operational performance and safety for its clients.
Ferguson Enterprises Inc. (NYSE:FERG) delivered Q1 2025 sales of $7.8 billion, representing nearly 1% growth despite market headwinds and approximately 2% deflation. The company achieved an adjusted operating profit of $706 million with a 9.1% adjusted operating margin, while adjusted diluted earnings per share declined 7.5% to $2.45. The company demonstrated resilience through volume growth of approximately 3%, with organic volume up approximately 2%, though this was offset by modest overall price deflation of around 2%. Notable performance came from the HVAC segment, which grew by 10%, while Waterworks revenues increased by 3%, demonstrating success in strategic growth initiatives.
Ferguson Enterprises Inc. (NYSE:FERG) maintained a strong balance sheet with 1.2x net debt to adjusted EBITDA and continued its capital allocation strategy through investments in organic growth, acquisitions, and shareholder returns, including a 5% dividend increase and $256 million in share repurchases. Looking forward, FERG expects net sales growth in the low single-digit range, with markets being down low single digits, while maintaining market outperformance of approximately 300 to 400 basis points. The company remains well-positioned to capitalize on structural tailwinds in the underbuilt and aging US housing market, nonresidential large capital projects, and growing demand for plumbing and HVAC specialized professionals, which is further reinforced by significant insider buying in the last six months.
Overall, Ferguson Enterprises Inc. (NYSE:FERG) ranks first on our list of the 10 large-cap stocks with insider buying in 2025. While we acknowledge the potential of FERG as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than FERG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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