Billionaire Nelson Peltz’s 8 Stock Picks with Highest Upside Potential

5. Ferguson Enterprises Inc. (NYSE:FERG)

Trian Partners’ Stake: $214,753,648

Number of Hedge Fund Holders: 72

Analyst Upside Potential: 20.38%

Ferguson Enterprises Inc. (NYSE:FERG) is one of the largest distributors of heating, plumbing, ventilation, air conditioning, and other related products in North America. It operates by serving residential and non-residential contractors to supply value-added construction and renovation products.

On April 16, Ferguson Enterprises Inc. (NYSE:FERG) announced two major acquisitions including Independent Pipe & Supply Corp. and National Fire Equipment Ltd. along with National Fire Fabrication Ltd. These acquisitions are anticipated to enhance the company’s business in commercial and fire & fabrication business while expanding the market position in both the US and Canada.

The company on March 11, released its second-quarter results, highlighting sales growth of 3% to reach $6.9 billion. Management noted that while the sales volume increased by 5%, it was partly offset by the continued deflation. As a result, the company has also adjusted its full-year operating margins outlook for the year from 9.0% – 9.5% to 8.3% – 8.8%. Nevertheless, Parnassus Core Equity Fund in its Q4 2024 investor letter stated that Ferguson Enterprises Inc. (NYSE:FERG) is expected to benefit from the tailwinds of the housing shortage and aging infrastructure. Here’s what the fund said about the company:

“We also added Industrials sector holding Ferguson Enterprises Inc. (NYSE:FERG), a leading distributor of plumbing supplies and construction equipment. Ferguson’s highly efficient operations, extensive distribution networks and broad product offerings give the company clear leadership over smaller, local competitors. Ferguson’s scale advantages are expected to increase as it consolidates the fragmented industry structure. Additionally, the structural tailwinds of aging infrastructure and housing shortages should support Ferguson’s long-term organic growth. Led by a tenured management team with a strong track record, the company is well positioned going forward, we believe.”