We recently published a list of the 15 Small-Cap Manufacturing Stocks Hedge Funds Are Buying. In this article, we are going to take a look at where Carlisle Companies Inc. (NYSE:CSL) stands against other small-cap manufacturing stocks.
Earlier on February 26, Liz Ann Sonders, Charles Schwab chief investment strategist, joined CNBC’s ‘Squawk on the Street’ to discuss how manufacturing could stall due to the ongoing policy uncertainty. She thinks that the current market sentiment is focused on concerns about economic growth more than on inflation. Sonders noted a list of weakening indicators, such as consumer sentiment surveys, retail sales, and services PMI figures. She emphasized that rising policy uncertainty also manifests in reduced intentions to purchase large capital goods and causes a pullback in capital expenditures and spending plans. Sonders explained that, over the past year, market yields have alternated between responding primarily to inflation data and growth signals, both during periods of increases and declines. She thinks that the recent downward movement in yields is driven by worries about slowing growth more than by expectations of declining inflation. This has led investors to favor more defensive sectors within the market, which reflects a broader sense of caution.
Recent PMI data has shown services activity starting to decline, but manufacturing has picked up. This could result in a potential positive convergence between the two sectors. But Sonders thinks that this improvement in manufacturing could be at risk due to the policy-related uncertainty still ongoing. Therefore, many companies within the manufacturing sector are now increasingly cautious about future investments and expansion. Sonders also pointed out that while there have been discussions about significant deficit reductions, originally targeting $2 trillion, the actual figures are much smaller. The current visible cuts amount to less than $10 billion. She argued that it is premature to focus on these spending cuts alone, as the effects of tariffs, immigration, and deportation policies, and regulatory changes are collectively putting downward pressure on growth estimates and upward pressure on inflation expectations. She added that while tax policy changes are being discussed, these are more likely to affect the year-end outlook rather than the near-term trajectory.
Our Methodology
We first sifted through financial media reports, iShares U.S. Manufacturing ETF, Vanguard Industrials ETF, and Insider Monkey’s Q4 2024 hedge funds database reports to compile a list of the small-cap manufacturing stocks hedge funds are buying. For this article, we define small-cap stocks as those that trade between $10 billion and $20 billion, as of April 25. We then selected the top 15 stocks and ranked them in ascending order of the number of hedge funds that have stakes in them. In cases where an equal number of hedge funds held two or more stocks, we used the market cap as a tiebreaker.
Why are we interested in 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A close-up of a technician assembling a complex wiring harness for a building product.
Carlisle Companies Inc. (NYSE:CSL)
Market Capitalization as of April 25: $16.22 billion
Number of Hedge Fund Holders: 42
Carlisle Companies Inc. (NYSE:CSL) manufactures and supplies building envelope products and solutions. It operates through two segments: Carlisle Construction Materials and Carlisle Weatherproofing Technologies. The company produces single-ply roofing products and warranted roof systems & accessories. It also offers building envelope solutions.
In Q1 2025, the company’s CCM (Carlisle Construction Materials) segment reported revenues of $799 million, which was up 2% year-over-year. This was supported by the acquisition of MTL and strong reroofing activity, which helped offset a 1% decline in organic revenue. The MTL acquisition boosted Carlisle’s CCM revenue through expanded product offerings in architectural metals and the realization of substantial cost synergies. The reroofing demand makes up 70% of CCM’s commercial business.
Carlisle Companies Inc. (NYSE:CSL) anticipates mid-single-digit revenue growth for the CCM segment for 2025. While Q2 2025 for CCM will reflect a negative impact from accelerated purchases in Q1 ahead of anticipated tariff-related price increases, the underlying strength will eventually provide a stable and recurring revenue stream years to come.
Madison Mid Cap Fund stated the following regarding Carlisle Companies Incorporated (NYSE:CSL) in its Q1 2025 investor letter:
“We added to two stocks during the quarter. Carlisle Companies Incorporated (NYSE:CSL) shares were weak given concerns over residential and non-residential real estate demand given interest rates and economic uncertainty. However, valuation looks compelling given the solid long-term outlook for demand and earnings.”
Overall, CSL ranks 6th on our list of the small-cap manufacturing stocks hedge funds are buying. While we acknowledge the growth potential of CSL, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CSL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
