7 Best Heavy Equipment and Industrial Machinery Stocks to Buy

5. Chart Industries, Inc. (NYSE:GTLS)

Number of Hedge Fund Investors In Q1 2024: 48

Chart Industries, Inc. (NYSE:GTLS) is a Georgia based industrial products company that sells equipment used to store, transport, and manage gasses. Its products can allow Chart Industries, Inc. (NYSE:GTLS) to take a sizeable role in the green energy industry as they help industries manage hydrogen, natural gas, and carbon dioxide. Chart Industries, Inc. (NYSE:GTLS) also benefits from a massive order backlog due to its global operations base and the high barriers to entry in its industry. As of the first quarter, the firm’s backlog sat at $4.3 billion, which set a new record. Chart Industries, Inc. (NYSE:GTLS) also reduced its financing costs by removing $14 million in annual interest expenses by repricing a $1.6 billion term facility. However, its shares are quite vulnerable, particularly in today’s restrictive environment for industrial stocks. This was evidenced by a massive 25% share price drop in October 2023 when it reported a 10% revenue drop to $898 million and missed analyst estimates of $1.03 billion. At the same time, Chart Industries, Inc. (NYSE:GTLS) reduced its annual guidance to $3.45 billion to $3.5 billion from an earlier $3.66 billion to $3.8 billion. The actual revenue for the year sat at $3.35 billion.

Baron Funds mentioned Chart Industries, Inc. (NYSE:GTLS) in its Q4 2023 investor letter. Here is what the fund said:

Chart Industries, Inc. is a global leader in design, engineering, and manufacturing of process and storage technologies and equipment for gas and liquid handling. Shares fell after the company missed analyst earnings forecasts on project revenue recognition timing. Chart also held an Investor Day in which it provided mid-term financial targets instead of further detail on its 2024 outlook, falling short of some analyst expectations. We remain bullish on the company’s prospects. Business fundamentals are strong, with management seeing solid demand across the portfolio and cost synergies from the Howden acquisition are ahead of company targets. Chart also has a much larger than normal backlog supporting growth in 2024, providing good visibility. We believe the integration of Howden is proceeding well, with the combined company on track to become a globally diversified, high- quality, high-growth industrial business with proprietary technology and solutions serving the growing hydrogen, carbon capture, liquid natural gas, and other end markets. Chart’s valuation remains attractive relative to its growth and margin profile, in our view.