10 Best Electrical Equipment Stocks to Buy Now

7. Hayward Holdings, Inc. (NYSE:HAYW)

Number of Hedge Fund Holders: 31

Hayward Holdings, Inc. (NYSE:HAYW) remains a key player in the broader electrical equipment industry, which specializes in manufacturing, designing, and marketing of pool equipment as well as associated automation systems. The company is well-placed to reap the benefits of growth opportunities in the electrical equipment industry, mainly in the pool and outdoor living sectors. The elevated demand trends for energy-efficient and connected technologies remain in line with Hayward Holdings, Inc. (NYSE:HAYW)’s product offerings, like its SmartPad^TM platform and energy-efficient pool equipment. For FY 2025, the company expects net sales of ~$1.060 billion – $1.100 billion and adjusted EBITDA of $280 million – $290 million.

The installed base of pools witnesses a rise every year, offering growth opportunities, and Hayward Holdings, Inc. (NYSE:HAYW) benefits from supportive secular demand trends in outdoor living, sunbelt migration, and technology adoption. For Q1 2025, the company’s net sales rose by 8% to $228.8 million. This rise was due to volume growth, favorable impact from acquisitions, and positive net price.

Fiduciary Management Inc. (FMI), an independent money management firm, released its Q4 2024 investor letter. Here is what the fund said:

“Hayward Holdings, Inc. (NYSE:HAYW) is a pool equipment manufacturer that primarily serves the residential pool market. Their products include pumps, automation and sanitization equipment, pool heaters, filters, lighting and water features, and cleaners. The company estimates that 50% of its business comes from repair/replacement sales which provides a stable revenue base. Pool service professionals recommend and install products for end customers. They care about a host of factors more than price when selecting equipment, as they’re not ultimately paying for the product, which creates barriers to entry and strong pricing power for incumbent players. The industry has historically raised price to at the very least offset cost inflation, and in many years has priced above cost inflation. We believe a good time to buy the business is when discretionary spending is depressed, as is the case today. New pool construction is at its lowest point since 2014 and remodel activity is subdued. The shares appear to be a good relative value in an expensive market. We initiated a 1.5% position in December 2024.”