12 Best ADR Stocks to Buy According to Hedge Funds

7. Johnson Controls International plc (NYSE:JCI)

Number of Hedge Fund Holders: 55

Johnson Controls International plc (NYSE:JCI) is an Ireland-based global leader in smart, healthy, and sustainable building technologies and solutions. The company provides products and services related to HVAC systems, building automation, fire and security systems, and energy management. Its offerings serve commercial, industrial, and residential buildings, with a focus on energy efficiency and digital integration through platforms like OpenBlue. JCI works with building owners, governments, and institutions to modernize infrastructure and support sustainability goals through advanced technologies and services.

Johnson Controls International plc (NYSE:JCI) is undergoing significant strategic changes with a new CEO joining in less than a month, focusing on reorganizing the operating model to drive growth and profit opportunities. The company maintains a mid-single-digit growth algorithm currently, with the potential to accelerate beyond this rate through an improved operating model and market approach. Service business represents about one-third of revenue, with over half being contractual revenue, and the company has improved its service retention rates through enhanced connected services capabilities. The Global Products segment has demonstrated strong performance with margins reaching 30%, driven by volume growth in both indirect and direct channels, with the potential to reach mid-30s as volume continues to grow.

Johnson Controls International plc (NYSE:JCI)’s capital allocation strategy includes plans to return approximately $5 billion to shareholders following the Bosch transaction, while maintaining an active M&A pipeline focused on core domain capabilities. JCI is targeting improved cash conversion rates moving into the 90s, with expectations to reach par conversion over the next couple of years as restructuring costs decrease and working capital management continues to improve. With 55 hedge funds owning the stock and a new promising CEO in place, JCI is one of the best ADR stocks to buy.