In this article, we will be taking a look at the 5 best industrial stocks to buy according to hedge funds. To read our analysis of the industrials sector, you can go directly to see the 14 Best Industrial Stocks to Buy According to Hedge Funds.
5. General Electric Company (NYSE:GE)
No of Hedge Fund Holders: 61
General Electric Company (NYSE:GE) is a Massachusetts, United States-based company involved in various industries such as additive manufacturing, aviation, and renewable energy.
On May 24, GE Vernova, a unit of General Electric Company (NYSE:GE), announced that it intends to establish a new manufacturing assembly line for the company’s 6.1 MW onshore wind turbine. The company will be investing $50 million at its facility in Schenectady, New York, to achieve this goal. General Electric Company (NYSE:GE) offers an annual forward dividend yield of 0.31% as of May 25.
Vulcan Value Partners shared its outlook on General Electric Company (NYSE:GE) in its Q1 2023 investor letter. Here’s what the firm said:
“General Electric Company (NYSE:GE) was a material contributor during the quarter. With the successful spin-off of GE HealthCare in early January, the company operates in two major markets: GE Aerospace and GE Vernova. GE Aerospace powers three out of every four commercial flights. GE Vernova helps generate 30% of the world’s electricity and has a meaningful role to play in the energy transition. The company’s service activities, which are higher margin and more resilient, represent approximately 60% of revenue and 85% of its backlog. The company reported strong fourth quarter 2022 results and management’s 2023 outlook is positive.”
4. CSX Corporation (NASDAQ:CSX)
No of Hedge Fund Holders: 61
CSX Corporation (NASDAQ:CSX) is a prominent provider of rail-based freight transportation services in North America. The company is also involved in the real estate sector.
Soroban Capital Partners was the leading hedge fund investor in CSX Corporation (NASDAQ:CSX) during the first quarter of the year. The stock held a weightage of 21.6% in the hedge fund’s overall portfolio. Of the 943 hedge funds in Insider Monkey’s database as of Q1 2023, 61 funds held a stake worth over $4.03 billion in CSX Corporation (NASDAQ:CSX).
3. Deere & Company (NYSE:DE)
No of Hedge Fund Holders: 65
Deere & Company (NYSE:DE) is an American company renowned for manufacturing a diverse range of products, such as diesel engines, heavy equipment, and agricultural machinery.
In Q2 2023, Deere & Company’s (NYSE:DE) construction and forestry segment recorded an increase in revenue of 30% to $17.4 billion. Furthermore, the revenue for equipment operations of the company reached $16.08 billion, reflecting an increase of 34%.
The number of hedge funds holding a stake in Deere & Company (NYSE:DE) increased from 63 in Q4 2022 to 65 during Q1 2023.
2. TransDigm Group Incorporated (NYSE:TDG)
No of Hedge Fund Holders: 67
TransDigm Group Incorporated (NYSE:TDG) is a Cleveland, Ohio-based aerospace manufacturing corporation. The company has secured the second position on our list of the best industrial stocks to buy according to hedge funds.
At the end of Q1 2023, 67 elite funds held a stake worth over $5.56 billion in TransDigm Group Incorporated (NYSE:TDG). AltaRock Partners was the leading hedge fund investor in the company during the first quarter of the year.
Here’s what Vulcan Value Partners said about TransDigm Group Incorporated (NYSE:TDG) in its Q1 2023 investor letter:
“Additionally, Skyworks Solutions, Amazon, and TransDigm Group Incorporated (NYSE:TDG) were all material contributors during the quarter. We have discussed these companies at length in prior letters. TransDigm Group reported strong results during the quarter including an increase in revenue, and the company positively revised its outlook for the year. All three of these companies are executing well, their theses are intact, and we are pleased to own them at a discount to our estimate of intrinsic value.”
1. Union Pacific Corporation (NYSE:UNP)
No of Hedge Fund Holders: 85
Union Pacific Corporation (NYSE:UNP) is a Washington, United States-based transport company. The company covers an extensive network of 31,800 route miles across 23 states. With a fleet of 8,300 locomotives, it operates as a line haul carrier. Union Pacific Corporation (NYSE:UNP) offers an annual forward dividend yield of 2.65% as of May 25.
Here’s what Matrix Asset Advisors said about Union Pacific Corporation (NYSE:UNP) in its Q1 2023 investor letter:
“During the quarter we added a new position in Union Pacific Corporation (NYSE:UNP). Union Pacific (UNP) is the 2nd largest railroad network in the United States just behind Burlington Northern Santa Fe. The firm operates in the Western, Midwestern, and Southern portions of the United States. 90% of UNP sales come from the US and 10% from Mexico. Over the past decade, railroads gained market share from the trucking industry because it costs 10-40% less to ship via rails than trucks. The company has a long history of consistent operating growth and profitability. The shares fell from a high of $278 in May of 2022 after the firm experienced operating challenges due to a slower macro environment and higher expenses.”
Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily enewsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also check out our articles on the 12 Best Blue Chip Dividend Stocks To Buy and Bill Gates’ Most Recent Portfolio: Top 15 Stock Picks.
