5 Stocks Hedge Funds Are Investing In

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1. Ferguson plc (NYSE:FERG)

Number of hedge fund holdings at the end of Q3: 46

2024 Return: 12.8%

Ferguson plc (NYSE:FERG), founded in 1953, is a leading plumbing and heating products distributing company. Strong fundamentals, an efficient supply chain, a wide range of customers and future growth prospects give it popularity among investors. Ferguson plc (NYSE:FERG) is headquartered in Wokingham, the United Kingdom, and has a market capitalization of $34.164 billion.

Right Tail Capital made the following comment about Ferguson plc (NYSE:FERG) in its Q3 2023 investor letter:

“Ferguson plc (NYSE:FERG) is a leading US-focused distributor ($33B mkt cap) of plumbing and HVAC supplies that is split between non-residential (48%) and residential (52%) as well as repair/remodel (60%) and new construction (40%). Like other high-quality distributors, Ferguson benefits from a prime spot in its value chain. It has many suppliers (over 30,000), customers (~1 million), and small competitors. By providing great service and parts availability, Ferguson guides its customers to the parts they want in a timely fashion.

I think last year the market was worried that Ferguson had over-earned due to rising prices and excess demand during covid. Furthermore, the company had removed its primary listing in the United Kingdom that caused some force selling among European index holders. Right Tail had the key insight that…” (Click here to read the full text)

Ferguson is a secular growth company that has been posting double digit topline growth rates since 2020 and is currently trading at a forward PE of only 20. This is the type of stock Warren Buffett buys. We need to take a much closer look at Ferguson over the next couple of weeks. Please subscribe to receive a free email alert when we publish our deep-dive Ferguson article:

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