We recently published a list of 12 Best Industrial Distribution Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Applied Industrial Technologies, Inc. (NYSE:AIT) stands against other best industrial distribution stocks to buy according to hedge funds.
2025: A Year of Tariffs and Uncertainty
A pressing concern looming over the United States currently is the potential impact of tariffs which have affected distributors as they encountered increased costs for imported goods.
While President Trump has already announced tariffs for Canada, Mexico, and China, CNBC reported that several short- to medium-term effects of this move include a slowdown in global economic growth slowing down, especially in nations with large manufacturing sectors, as well as higher prices for American consumers and higher-for-longer U.S. interest rates, and eventually a stronger USD. Among some of the sectors expected to be hit are industrials and manufacturing other than automotive, makers of chips and semiconductor equipment, consumer goods, Chinese e-retailers, and green energy.
Simultaneously, Trump imposed a 25% tariff on all steel and aluminum imports into the country. According to the New York Times, the effect of these tariffs would flow through to the users of metal goods. Items that are expected to get expensive include construction, housing, and appliances as well as cars, canned food, beer, and fizzy drinks. Amidst concerns regarding how these tariffs would deter development and rebuilding and negate the President’s agenda of making national housing affordable, the National Association of Home Builders has requested to exempt building materials from the tariffs.
Our Methodology:
In order to compile a list of the 12 best industrial distribution stocks to buy according to hedge funds, we used a stock screener to screen relevant stocks with the highest market caps. Moving on, we shortlisted the top 12 stocks from our list which had the highest number of hedge fund holders. The 12 best industrial distribution stocks to buy according to hedge funds have been arranged in ascending order of their hedge fund holders as of Q3 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A worker in safety gear inspecting a bearing in an industrial motion factory.
Applied Industrial Technologies, Inc. (NYSE:AIT)
Number of Hedge Fund Holders: 27
Applied Industrial Technologies, Inc. (NYSE:AIT) is a value-added distributor and technical solutions provider of industrial motion, fluid power, flow control, automation technologies, and related maintenance supplies.
AIT serves as one of the largest distributors and service providers of industrial motion and control technologies globally. The company occupies a leading position within critical areas of the industrial supply chain, with its scale and technical expertise in motion, power, and control technologies driving a strong competitive moat. Simultaneously, the firm is uniquely positioned to advantage of emerging growth related to next-generation automation and smart technologies.
In a large and fragmented market, Applied Industrial Technologies, Inc. (NYSE:AIT) has been a proven acquirer as evidenced by 36 acquisitions since 2012 representing more than $1 billion in annual sales. In January, the firm successfully completed the acquisition of Hydradyne which marked a major milestone and set the stage for a solid growth and operational momentum. While Hydradyne is a premier provider of fluid power solutions, the acquisition is to potentially improve AIT’s leading fluid power distribution position in the United States.
Overall, AIT ranks 9th on our list of best industrial distribution stocks to buy according to hedge funds. While we acknowledge the potential of AIT as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than AIT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
