In this piece, we will take a look at the 5 most profitable industrial stocks to buy now. If you want to go through our overview of the industrial sector and some recent developments, then take a look at 14 Most Profitable Industrial Stocks Now.
5. Lockheed Martin Corporation (NYSE:LMT)
Number of Hedge Fund Holders: 60
Latest TTM Net Income: $6.97 billion
Lockheed Martin Corporation (NYSE:LMT), formed by the merger of Lockheed Corporation and Martin Marietta in March 1995, is a global American corporation specializing in aerospace, defense, arms, information security, and technology. Headquartered in North Bethesda, Maryland, the company operates in four segments: Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space.
The U.S. Air Force Research Laboratory (AFRL) has granted Lockheed Martin Corporation (NYSE:LMT) a $33.7 million award under the Joint Emergent Technology Supplying On-Orbit Nuclear (JETSON) initiative. The goal of JETSON is to advance high-power nuclear electric power and propulsion technologies along with spacecraft design. The project involves launching a fission reactor that is activated once in space. The reactor will generate heat, transferred to Stirling power converters to produce electricity. This generated power can be utilized for spacecraft payloads or to power electric thrusters for propulsion.
According to Insider Monkey’s third quarter database, 60 hedge funds were long Lockheed Martin Corporation (NYSE:LMT), compared to 52 funds in the earlier quarter. John Overdeck and David Siegel’s Two Sigma Advisors is the largest stakeholder of the company, with 895,100 shares worth $366.06 million.
4. United Parcel Service, Inc. (NYSE:UPS)
Number of Hedge Fund Holders: 47
Latest TTM Net Income: $8.56 billion
Established in 1907, United Parcel Service, Inc. (NYSE:UPS) originated as the American Messenger Company with a focus on telegraphs. Over time, it has evolved into a Fortune 500 company and is now one of the largest shipping couriers globally.
In early November, United Parcel Service, Inc. (NYSE:UPS) made an announcement confirming the successful completion of its acquisition of MNX Global Logistics, a leading global provider of time-critical logistics services. The transaction was finalized on November 2, 2023, after obtaining all necessary regulatory approvals. This strategic acquisition enhances UPS’s capacity for time-critical logistics, with a particular focus on serving healthcare customers across the United States, Europe, and Asia.
As of the close of Q3 2023, 42 hedge funds tracked by Insider Monkey owned stakes in United Parcel Service, Inc. (NYSE:UPS), compared with 47 in the previous quarter. The consolidated value of these stakes is more than $1.8 billion.
In its Q3 2023 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and United Parcel Service, Inc. (NYSE:UPS) was one of them. Here is what the fund said:
“A higher-for-longer rate mentality taking hold was a headwind for economically sensitive stocks. Rising wages have been one of the main drivers of inflation, and this has proved to be a sticky area, keeping the Fed’s attention and weighing on share prices. For example, United Parcel Service, Inc. (NYSE:UPS) renegotiated a wage increase for its union-backed workforce this summer, which weighed on margins that were already being constricted by slowing volumes. While the new union deal will dampen profits over the next 12 months due to the front-end-loaded nature of the new five-year contract, management gained increased flexibility to deploy automation, which we think should further enhance UPS’s strong competitive position and provide a long-term tailwind to profitability.”
3. Caterpillar Inc. (NYSE:CAT)
Number of Hedge Fund Holders: 50
Latest TTM Net Income: $9.11 billion
Caterpillar Inc. (NYSE:CAT), commonly referred to as CAT, stands as a leading American manufacturer specializing in construction, mining, and various engineering equipment. Recognized as the largest manufacturer of construction equipment globally, the company holds a prominent position in the industry.
On November 8, Tigress Financial, an investment advisory, affirmed a Buy rating on Caterpillar Inc. (NYSE:CAT) stock and increased the price target to $295 from $282. The analysis highlighted the company’s favorable position to capitalize on the global expansion in the construction sector.
As of the conclusion of the third quarter of 2023, Insider Monkey’s database revealed that 50 hedge funds held positions valued at $4.8 billion in Caterpillar Inc. (NYSE:CAT). This figure remained consistent with the previous quarter, where the stakes were valued at $2.5 billion.
2. Deere & Company (NYSE:DE)
Number of Hedge Fund Holders: 55
Latest TTM Net Income: $10.17 billion
Deere & Company (NYSE:DE), operating under the trade name John Deere, is an American corporation that produces agricultural machinery, heavy equipment, forestry machinery, diesel engines, drivetrains for heavy equipment, and lawn care equipment. The company also offers financial services and engages in other related activities.
The company reported quarterly earnings of $8.26 per share, up from $7.44 per share a year ago, after adjusting for non-recurring items. This result marks an earnings surprise of 10.28%. In the previous quarter, analysts anticipated earnings of $8.14 per share, but Deere & Company (NYSE:DE) exceeded expectations with earnings of $10.20 per share, representing a surprise of 25.31%. Over the last four quarters, the company has consistently outperformed consensus EPS estimates.
During September 2023, 55 out of the 910 hedge funds profiled by Insider Monkey were the firm’s shareholders. Deere & Company (NYSE:DE)’s biggest hedge fund investor is Michael Larson’s Bill & Melinda Gates Foundation Trust as it owns $1.4 billion worth of shares.
1. General Electric Company (NYSE:GE)
Number of Hedge Fund Holders: 76
Latest TTM Net Income: $10.59 billion
Founded in 1892 and headquartered in Boston, General Electric Company (NYSE:GE) is a leading American multinational conglomerate. The company operates in diverse sectors, including aerospace, power, renewable energy, digital industry, additive manufacturing, and venture capital and finance.
On October 24, 2023, General Electric Company (NYSE:GE) released its third-quarter results for the period ending September 30. The company showcased notable growth in top-line, operating profit, and cash, resulting in an upward revision of the 2023 guidance. In addition, its reported total orders amounted to $17.9 billion, reflecting a 19% year-over-year increase, with organic orders experiencing an 18% uptick. Total revenues (GAAP) for the quarter reached $17.3 billion, marking a 20% year-over-year increase, while adjusted revenues stood at $16.5 billion, indicating an 18% organic rise.
In the third quarter, 76 hedge funds had a stake worth nearly $10.35 billion in General Electric Company (NYSE:GE). In the previous quarter, the company was a part of 71 hedge fund portfolios with a combined stake of $10.19 billion. The most prominent stake in Q3 was held by Chris Hohn’s TCI Fund Management with 41.65 million General Electric Company (NYSE:GE) shares worth $4.6 billion.
Here is what Longleaf Partners Fund said about General Electric Company (NYSE:GE) in its Q3 2023 investor letter:
“After a busy first half of the year, we initiated one new position in the quarter in a business we have successfully owned previously and were able to buy again at a discount within a new corporate structure. We opportunistically trimmed and added to several positions throughout the quarter, and we exited General Electric Company (NYSE:GE) and our small position in Hasbro after the share price ran away from us. GE was a multi-year portfolio holding for us that started out rocky but ultimately was a good illustration of owning a “quality” business that was temporarily viewed as “value” (aka, perceived as low quality) before ultimately being weighed properly by the market. CEO Larry Culp was a great partner, creating significant value for shareholders and closing the price-to-value gap. Under his leadership, GE materially improved its operations and is well under way on plans to simplify the business by separating it into three world-class companies. The market has finally caught up with reality versus perception and is pricing GE accordingly. Unfortunately, this means we no longer see a margin of safety for the business but will continue to watch GE and Culp closely and hope to have the opportunity to partner with him again.”
Disclosure: None. You can also take a look at 14 Best Automation Stocks To Buy Now and Hedge Funds Say These Penny Stocks Are Poised to Explode.
