In this article, we will look at the 5 best manufacturing stocks to invest in. If you want to explore similar stocks, you can go to 11 Best Manufacturing Stocks To Invest In.
5. Albemarle Corporation (NYSE:ALB)
Number of Hedge Fund Holders: 39
Albemarle Corporation (NYSE:ALB) is a leading global manufacturer of engineered specialty chemicals. The company is one of the biggest producers of lithium in the world and is one of the best manufacturing stocks to buy now. As of October 7, the stock has surged 15.15% year to date.
Wall Street sees material upside to Albemarle Corporation (NYSE:ALB). On October 3, BofA analyst Matthew DeYoe raised his price target on Albemarle Corporation (NYSE:ALB) to $332 from $262 and reiterated a Neutral rating on the shares. On October 4, Deutsche Bank analyst Corinne Blanchard raised his price target on Albemarle Corporation (NYSE:ALB) to $305 from $270 and maintained a Buy rating on the shares.
At the end of Q2 2022, 39 hedge funds were eager on Albemarle Corporation (NYSE:ALB) and held stakes worth $600 million in the company. This is compared to 44 positions in the previous quarter with stakes worth $454.4 million. As of June 30, Marshall Wace LLP is the most prominent shareholder in Albemarle Corporation (NYSE:ALB) and has stakes worth $154.5 million in the company.
4. Carrier Global Corporation (NYSE:CARR)
Number of Hedge Fund Holders: 41
Carrier Global Corporation (NYSE:CARR) is a major player in the HVAC industry and a prominent manufacturer of HVAC systems, building technologies, and security systems. This July, Jefferies analyst Stephen Volkmann revised his price target on Carrier Global Corporation (NYSE:CARR) to $47 from $55 and reiterated a Buy rating on the shares. On July 18, Deutsche Bank analyst Nicole DeBlase adjusted her price target on Carrier Global Corporation (NYSE:CARR) to $43 from $49 and maintained a Hold rating on the shares.
Carrier Global Corporation (NYSE:CARR) is undervalued, pays dividends, and is cash-rich. As of October 7, the stock is trading at a PE multiple of 11x and is offering a forward dividend yield of 1.57%. The company has free cash flows of $988 million.
At the end of Q2 2022, 41 hedge funds were long Carrier Global Corporation (NYSE:CARR) and held stakes worth $1.15 billion in the company. This is compared to 42 positions in Q1 2022 with stakes worth $1.14 billion. As of June 30, Renaissance Technologies is the largest shareholder in Carrier Global Corporation (NYSE:CARR) and has stakes worth $238 million in the company.
3. Caterpillar Inc. (NYSE:CAT)
Number of Hedge Fund Holders: 45
Caterpillar Inc. (NYSE:CAT) manufactures and markets construction and mining equipment worldwide. On October 4, Caterpillar Inc. (NYSE:CAT) announced that it will unveil four electric machine prototypes, including battery prototypes, at the bauma trade fair 2022 in Munich, Germany.
On August 31, Baird analyst Mircea Dobre maintained a buy-side Outperform rating and his $224 price target on Caterpillar Inc. (NYSE:CAT). On October 6, JPMorgan analyst Tami Zakaria raised her price target on Caterpillar Inc. (NYSE:CAT) to $220 from $205 and reiterated a buy-side Overweight rating on the shares.
At the close of the second quarter of 2022, 45 hedge funds held stakes in Caterpillar Inc. (NYSE:CAT). The total value of these stakes amounted to $3.25 billion. As of June 30, Fisher Asset Management is the most prominent investor in Caterpillar Inc. (NYSE:CAT) and has stakes worth $1.34 billion in the company.
Here is what Diamond Hill Capital had to say about Caterpillar Inc. (NYSE:CAT) in its first-quarter 2022 investor letter:
“We also initiated a position in Caterpillar (NYSE:CAT), one of the world’s leading manufacturers of construction and mining equipment. It’s a company we know well, as we have owned it in our large cap portfolio for quite some time. Recent share price weakness provided an opportunity for us to add it to our large cap concentrated portfolio at an attractive discount to our estimate of intrinsic value. We believe Caterpillar stands to benefit from increased capital investment supported by a healthier/recovering end market environment, particularly in construction and mining.”
2. Emerson Electric Co. (NYSE:EMR)
Number of Hedge Fund Holders: 47
Emerson Electric Co. (NYSE:EMR) manufactures a variety of products including motors, alternators, fluid control systems, plastic joining equipment, and metal welding equipment among other equipment. On August 16, Argus analyst John Eade raised his price target on Emerson Electric Co. (NYSE:EMR) to $98 from $95 and reiterated a Buy rating on the shares. On October 3, Barclays analyst Julian Mitchell revised his price target on Emerson Electric Co. (NYSE:EMR) to $80 from $82 and reiterated an Equal Weight rating on the shares.
Emerson Electric Co. (NYSE:EMR) is one of the best manufacturing stocks to buy now and is currently trading at a bargain. As of October 7, the stock has a trailing twelve-month PE ratio of 14.73 and is offering a forward dividend yield of 2.58%. The company has free cash flows of roughly $2 billion.
At the end of the second quarter of 2022, 47 hedge funds disclosed ownership of stakes in Emerson Electric Co. (NYSE:EMR). This is compared to 45 positions in the previous quarter. As of June 30, Citadel Investment Group is the top shareholder in Emerson Electric Co. (NYSE:EMR) and has stakes worth $233.35 million in the company.
1. Deere & Company (NYSE:DE)
Number of Hedge Fund Holders: 54
Deere & Company (NYSE:DE) is a major manufacturer of agriculture machinery and equipment. On August 19, the company released earnings for the third quarter of fiscal 2022. The company reported earnings per share of $6.16 and generated a revenue of $13 billion, up 24.8% year over year, and beat expectations by $157.8 million. As of October 7, Deere & Company (NYSE:DE) is trading at a PE multiple of 17x, has gained 2.84% over the past twelve months, and is offering a forward dividend yield of 1.27%. The stock is one of the best manufacturing stocks to invest in right now.
On September 13, DA Davidson analyst Michael Shlisky reiterated his Buy rating and $445 price target on Deere & Company (NYSE:DE). This August, Argus analyst John Eade raised his price target on Deere & Company (NYSE:DE) to $420 from $390 and maintained a Buy rating on the shares.
At the close of Q2 2022, 54 hedge funds were long Deere & Company (NYSE:DE) and held stakes worth $1.58 billion in the company. Of those, First Eagle Investment Management was the top shareholder in the company and held stakes worth $294.7 million.
Here is what LRT Capital Management had to say about Deere & Company (NYSE:DE) in its second-quarter 2022 investor letter:
“Deere & Company (NYSE:DE) manufactures machines and equipment, which help the agriculture and construction industries. The company’s production and precision agriculture segment manufacture global equipment and technology solutions for production-scale growers of large grains, small grains, cotton, and sugar. The small agriculture and turf segment develops equipment for dairy and livestock producers, crop producers, and turf and utility customers. Finally, the construction and forestry segment make a range of machines for the earthmoving, forestry, and roadbuilding production systems.
The company is the leader in farming and agricultural equipment and competes with the likes of CNH Industrial and Kubota Corporation. Deere has generated returns on equity of over 20%, and in many years well above 30%, for more than two decades. How is this possible when the company’s end markets are so cyclical?
Deere sells an “ongoing relationship” to farmers, as every piece of equipment purchased leads to a steady supply of future parts and related services. The true source of Deere’s competitive advantage is the company’s dealership network, and its ability and willingness to finance the purchase of its equipment for farmers. The unique nature of its distribution system and the credit decisions that are made at the distributor level have created a structure that has allowed the company to keep credit losses to astonishingly low levels.”
You can also take a look at 10 Best Diversified Dividend Stocks To Buy and 12 Best Consumer Staple Stocks.
