5 Most Profitable Industrial Stocks Now

In this article, we will look at the 5 most profitable industrial stocks now. If you want to explore similar stocks, you can also take a look at 13 Most Profitable Industrial Stocks Now.

5. The Boeing Company (NYSE:BA)

Number of Hedge Fund Holders: 53

The Boeing Company (NYSE:BA) is a multinational aerospace corporation that designs, manufactures, and sells commercial airplanes, military aircraft, satellites, and space vehicles. Founded in Seattle, Washington in 1916, Boeing has grown to become one of the largest aerospace companies in the world.

At the beginning of February, The Boeing Company (NYSE:BA) was awarded a $1.62 indefinite-quantity contract for guidance subsystem support, which provides for the Minuteman III Intercontinental Ballistic Missile guidance subsystem support. The project will be performed at Hill AFB, Utah, and is expected to be completed by February 1, 2039.

Earlier this January, Jefferies analyst Sheila Kahyaoglu raised the price target on The Boeing Company (NYSE:BA) to $250 from $240 and maintained a Buy rating on the shares. Although the analyst, believes that commercial profitability “remains elusive,” she states that 2023 could bring a positive inflection for this measure and for free cash flow based on strong demand. She forecasts Boeing’s deliveries to rise to 561 and 713 in 2023 and 2024, respectively, which support increasing free cash flow.

According to Insider Monkey’s data, 53 hedge funds were bullish on The Boeing Company (NYSE:BA) at the end of Q4 2022, compared to 42 funds in the prior quarter. Ken Griffin’s Citadel Investment Group is a prominent stakeholder of the company, with 5.35 million shares worth over $1 billion.

Jackson Square Partners made the following comment about The Boeing Company (NYSE:BA) in its Q3 2022 investor letter:

“For The Boeing Company (NYSE:BA)–in short, we believe the worst of Boeing’s idiosyncratic issues are behind it, the airframe duopoly remains as protected as ever, and at current prices (where we’ve been adding), the stock is trading around ~6x FCF on 2025E. Current airframe production is running materially below expected travel demand over the next 5-10 years, creating a structural supply/demand imbalance that we believe will drive a decade of strong growth in civil aerospace from here. In our 2Q’22 correspondence, we described the attributes of our ideal growth ballast and said we hoped to convert another in the coming months – we believe Boeing checks all those boxes.”

4. General Electric Company (NYSE:GE)

Number of Hedge Fund Holders: 59

General Electric, in full General Electric Company (NYSE:GE), is an American multinational conglomerate founded in 1892, and incorporated in New York state and headquartered in Boston. One of the largest and most-diversified corporations in the world, its products include electrical and electronic equipment, aircraft engines, and financial services.

Earlier this January, Argus analyst John Eade raised the price target on General Electric Company (NYSE:GE) to $90 from $85 and maintained a Buy rating on the shares. According to the analyst, the company’s restructuring plan under its current CEO to split the conglomerate into three units should lead to better cash flow, higher earnings, and higher multiples. The analyst views the company positively, stating that despite the high inflation, global economic troubles and the pandemic, GE is making progress.

59 of the 943 hedge funds polled by Insider Monkey during Q4 2022 had bought General Electric Company (NYSE:GE)’s shares. General Electric Company (NYSE:GE)’s largest investor is Richard S. Pzena’s Pzena Investment Management which owns 13.2 million shares that are worth $1.1 billion.

Vulcan Value Partners made the following comment about General Electric Company (NYSE:GE) in its Q4 2022 investor letter:

“General Electric Company (NYSE:GE) recently spun off its health care businesses, General Electric HealthCare Technologies, which has leading market share positions in medical imaging products including MRI devices and CT scanners. General Electric’s remaining businesses include Aerospace and its Power and Renewables business. Aerospace is performing well and comprises the bulk of General Electric’s value in our opinion. We believe that the spin-off of General Electric HealthCare Technologies has highlighted the value of General Electric’s remaining business units. General Electric intends to spin out its Power and Renewables business unit early in 2024.”

3. Deere & Company (NYSE:DE)

Number of Hedge Fund Holders: 63

Deere & Company (NYSE:DE), doing business as John Deere, is an American corporation that manufactures agricultural machinery, heavy equipment, forestry machinery, diesel engines, drivetrains used in heavy equipment, and lawn care equipment. The company also provides financial services and other related activities.

On February 22, Argus raised the price target on Deere & Company (NYSE:DE) to $485 from $475 and kept a Buy rating on the shares. According to the firm, the company’s management is well-versed in, and does a good job of, managing the factors it can control, which include pricing and costs. The firm further states that the company’s sales and earnings are benefitting in the current environment from relatively high commodity prices while its volumes are seemingly on the rise.

According to Insider Monkey’s data, 63 hedge funds were long Deere & Company (NYSE:DE) at the end of the fourth quarter of 2022, compared to 57 funds in the last quarter. Bill & Melinda Gates Foundation Trust is the biggest stakeholder of the company, with almost 4 million shares worth $1.67 billion.

ClearBridge Investments made the following comment about Deere & Company (NYSE:DE) in its Q4 2022 investor letter:

“Our industrials holdings produced robust absolute returns for the quarter. While the ISM Manufacturing Index fell in November to contractionary levels, our industrial holdings have largely been able to maintain earnings due to strong competitive positions, historically large backlogs and company-specific drivers. For example, Deere & Company (NYSE:DE) continues to benefit from a strong upgrade cycle as record farmers’ income is driving broad and rapid adoption of the company’s precision agricultural equipment.”

2. TransDigm Group Incorporated (NYSE:TDG)

Number of Hedge Fund Holders: 71

Founded in 1993 through the merger of four industrial aerospace companies by a private equity firm in a leveraged buyout, Transdigm Group Incorporated (NYSE:TDG), through its wholly owned subsidiaries, including TransDigm Inc., is a leading global designer, producer and supplier of highly engineered aircraft components, systems and subsystems.

On February 7, TransDigm Group Incorporated (NYSE:TDG) released its earnings report for the fiscal first quarter of 2023, according to which, the company raked in revenues amounting to $1.4 billion. The company’s EPS for the quarter came in at $4.58, beating market estimates by $0.28.

Truist analyst Michael Ciarmoli raised his price target on TransDigm Group Incorporated (NYSE:TDG) to $810 from $710 and maintained a Buy rating on the shares on February 8. According to Ciarmoli, the company’s Q1 results marked a “strong beat” while the management’s commentary points toward further earnings growth as high-margin aftermarket volumes continue to recover.

According to Insider Monkey’s data, 71 hedge funds were long TransDigm Group Incorporated (NYSE:TDG) at the end of Q4 2022, compared to 63 funds in the prior quarter. Sharlyn C. Heslam’s Stockbridge Partners is the largest stakeholder of the company, with 1.60 million shares worth $841 million.

Here is what Vulcan Value Partners has to say about TransDigm Group Incorporated (NYSE:TDG) in its Q2 2022 investor letter:

“TransDigm Group Inc. is an aerospace manufacturing firm that provides highly engineered, niche components for use on commercial and military aircraft. The vast majority of the company’s profits come from aftermarket sales of sole-sourced products. The company produces high levels of free cash flow and has an effective, shareholder-oriented management team who are good capital allocators. Despite the company’s strong results during the quarter and solid outlook, its stock price declined.”

1. Union Pacific Corporation (NYSE:UNP)

Number of Hedge Fund Holders: 83

Union Pacific Corporation (NYSE:UNP), also known simply as Union Pacific, is one of America’s leading transportation companies. Its principal operating company, Union Pacific Railroad, is North America’s premier railroad franchise, covering 23 states across the western two-thirds of the United States.

Earlier this January, Susquehanna analyst Bascome Majors raised the price target on Union Pacific Corporation (NYSE:UNP) to $218 from $215 and keeps a Positive rating on the shares. The analyst believes flattish 2023 EPS seems achievable against undemanding volume assumptions. Although the analyst raised estimates marginally, given the fairly full multiple, investors should wait for better entry points on signs of demand stabilization.

Union Pacific Corporation (NYSE:UNP) was a popular buy among elite funds in Q4 2022 as 83 hedge funds in Insider Monkey’s database owned stakes in the company, up from 74 in the previous quarter. The collective value of these stakes is nearly $5.4 billion.

Diamond Hill Capital Management mentioned Union Pacific Corporation (NYSE:UNP) in its Q2 2022 investor letter. Here is what the firm has to say:

“Union Pacific Corporation (NYSE:UNP) is a large railroad company that carries freight across the western US and between Canada and Mexico. It transports a variety of industrial goods, raw materials and containerized freight between major US ports, industrial hubs and international gateways. The goods that Union Pacific and other railroads transport are fundamental inputs in the economy and are resilient to long-term trends in the business cycle. We believe Union Pacific offers a compelling investment opportunity as its substantial infrastructure investments, relative cost advantages, limited leverage and the essential nature of the products it delivers provides the company with what we believe is one of the widest moats in the transportation sector. We also like that Union Pacific has a shareholder-oriented management team that is focused on growing earnings while returning capital to shareholders.”

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