11 Best Home Appliance Stocks to Invest In

Published on April 27, 2024 at 9:02 am by Sheryar Siddiq in Hedge Funds, News

In this article, we will be looking at the 11 best home appliance stocks to invest in.

Since ancient times, humans have continuously advanced their domestic equipment, from the earliest use of fire for cooking to modern innovations. As we have advanced within the modern age, comfort and convenience have emerged at the forefront of our endeavors. To that end, as long as people inhabit homes, there will be a persistent and increasing demand for home appliances. The market offers a wide range of products, from compact coffee makers to spacious refrigerators capable of storing large amounts of food. While stoves and electric cookware were among the first home appliances introduced in the early 1900s, the market has since expanded significantly in terms of availability and variety. As a result, it’s hardly surprising that home appliance companies rank among the largest globally, with industry leaders like Samsung and Panasonic emerging as modern-day giants. Falling within the broader consumer discretionary sector, the global home appliances market was valued at $708.15 billion in 2023. Projections indicate further growth, with the market expected to reach $1,203.11 billion by 2032, representing a compound annual growth rate (CAGR) of 6.20% during the forecast period.

Overall, stock prices of consumer discretionary companies typically fluctuate in line with the broader economy, classifying them as cyclical stocks. The most notable example in recent years came in the COVID-19 pandemic, which posed significant challenges not only for the home appliance sub-sector but also for the broader consumer discretionary sector. However, with the economy gradually reopening, investors now have a distinct opportunity within this sector. Jordan Michaels, Fidelity Sector Portfolio Manager, anticipates sustained robust performance from the consumer discretionary sector this year. Notably, the S&P 500 Consumer Discretionary Index closed 2023 with a notable total return of 42.41%, marking one of its strongest years to date. Apart from benefiting from a resilient consumer base, stocks within this sector capitalized on broader market trends that propelled the overall market upwards in 2023.

Homing in on the home appliance market specifically, the sector is witnessing significant growth in the realm of robotics and artificial intelligence (AI). Particularly successful are robots that automate simple chores like vacuuming or lawn mowing. Additionally, there’s a growing market for companion robots for children and innovative projects like Tesla’s assistant robot. This emergence of “smart” home appliances has sparked significant growth in this segment. According to a report by KBV Research, smart home appliances are projected to grow at a robust CAGR of 8.7% until 2028, reaching a value of $50 billion by the end of the forecast period. These appliances offer users a range of features, including remote control via smartphones, self-learning capabilities to adapt to user schedules, and improved energy management. Generative AI also plays a pivotal role in driving innovation, such as GE Appliances’ SmartHQ app, which enhances appliance intelligence and personalization using large language models similar to those powering tools like ChatGPT.

The promises these combinations hold are staggering, with many company execs arguing that it could put them on par or even ahead of their biggest competitors. For example, South Korean tech giant Samsung has strived to rival U.S. Big Tech Apple Inc. (NASDAQ:AAPL) in the realm of high-end smartphones and cutting-edge electronics for years. However, Han Jong-hee, vice chairman and head of Samsung’s Device eXperience (DX) division, asserts that with artificial intelligence (AI) technology at their disposal, Samsung stands on equal footing with, or even ahead of, its primary competitor. According to the Samsung home appliance chief, the company’s brand image among consumers ranks among the world’s finest, with the company having maintained top ratings in TV sales for 18 consecutive years, and its Galaxy line of smartphones fiercely competing with Apple’s iPhones.

In light of this, this article focuses on some of the top-performing home appliance stocks currently available in the market. Among the notable picks are Spectrum Brands Holdings, Inc. (NYSE:SPB), Amazon.com, Inc. (NASDAQ:AMZN), and Whirlpool Corporation (NYSE:WHR).

11 Best Home Appliance Stocks to Invest in

Our Methodology

We selected the following home appliance stocks based on hedge fund sentiment toward each stock. We have assessed the hedge fund sentiment from Insider Monkey’s database of 933 elite hedge funds tracked as of the end of the fourth quarter of 2023. The list is arranged in ascending order of the number of hedge fund investors in each firm. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).

11. Hamilton Beach Brands Holding Company (NYSE:HBB)

Number of Hedge Fund Holders: 8

Hamilton Beach Brands Holding Company (NYSE:HBB) is an American firm based in Glen Allen, Virginia, renowned for designing and distributing small household and specialty appliances globally. Its diverse product line includes food processors, electric grills, coffee makers, and toaster ovens.

As of the end of Q4 2023, Insider Monkey’s database indicated that 8 hedge funds maintained stakes in Hamilton Beach Brands Holding Company (NYSE:HBB), up from 6 in the previous quarter. The combined value of these stakes exceeded $15.08 million. Notably, Third Avenue Management emerged as the leading stakeholder of the company during Q4.

Third Avenue Management Small-Cap Value Fund stated the following regarding Hamilton Beach Brands Holding Company (NYSE:HBB) in its fourth quarter 2023 investor letter:

“Fourth quarter absolute performance for the Fund was driven by banks, real estate holdings, and Hamilton Beach Brands Holding Company (NYSE:HBB). We highlighted HBB in previous communications as supply chain woes pressured its balance sheet and market capitalization. Third quarter earnings continued trends established in the second quarter as HBB generated robust cash flow and strengthened its balance sheet. Investors were impressed, prompting a 42% rise in HBB’s shares in the fourth quarter. We are particularly proud of HBB’s operational rebound as the investment required plenty of attention over the past two years given the dour outlook in the post-Covid economy. Fund Management maintained conviction in the fundamentals, which prompted us to boost the position weighting at opportune times, and ultimately generated healthy returns for our shareholders.”

Much like Spectrum Brands Holdings, Inc. (NYSE:SPB), Amazon.com, Inc. (NASDAQ:AMZN), and Whirlpool Corporation (NYSE:WHR), Hamilton Beach Brands Holding Company (NYSE:HBB) ranks as one of the best home appliance stocks to invest in.

10. National Presto Industries, Inc. (NYSE:NPK)

Number of Hedge Fund Holders: 8

National Presto Industries, Inc. (NYSE:NPK) is an American company headquartered in Eau Claire, Wisconsin, specializing in the sale of small electric home appliances. Its product lineup includes pressure cookers, heat-controlled skillets, air fryers, waffle makers, electric heaters, and pizza ovens.

On February 20, National Presto Industries, Inc. (NYSE:NPK) released its quarterly earnings data, reporting earnings per share of $1.85 for the quarter. The conglomerate showcased a return on equity of 10.14% and a net margin of 10.14%. Additionally, it generated revenue of $98.42 million during the quarter.

In the fourth quarter of 2023, 8 out of the 933 hedge funds surveyed by Insider Monkey held a position in National Presto Industries, Inc. (NYSE:NPK). The largest investor in the company is Cliff Asness’ AQR Capital Management, which owns 61,228 shares valued at $4.91 million.

9. PC Connection, Inc. (NASDAQ:CNXN)

Number of Hedge Fund Holders: 9

PC Connection, Inc. (NASDAQ:CNXN) is a consumer technology company based in Merrimack, New Hampshire, specializing in the sale of home appliances such as camcorders, home audio systems, peripherals, cameras, and digital media players.

In the fourth quarter of 2023, PC Connection, Inc. (NASDAQ:CNXN) reported net sales of $696.5 million, representing a 4.9% decrease compared to the previous year. However, there was a notable increase in gross profit, which rose by 4.4% to $129.8 million. The company also experienced significant growth in net income for the quarter, with a 26.3% increase to $23.8 million, or $0.90 per diluted share. Additionally, there was a noteworthy expansion in gross margin, which increased by 166 basis points to 18.6%.

In the fourth quarter of 2023, Chuck Royce’s Royce & Associates emerged as the largest investor in PC Connection, Inc. (NASDAQ:CNXN), holding 122,292 shares valued at $8.21 million.

8. Thermon Group Holdings, Inc. (NYSE:THR)

Number of Hedge Fund Holders: 15

Thermon Group Holdings, Inc. (NYSE:THR) specializes in the design and sale of heating home appliances, including heat tracing systems, thermostats, boilers, air heaters, gas-fired blowers, and mounting brackets. Headquartered in Austin, Texas, the company has demonstrated significant financial achievements in Q3 2024.

Notably, Thermon Group Holdings, Inc. (NYSE:THR) reported a notable 12% increase in revenue, reaching $136.4 million during the quarter. This growth was primarily fueled by strong sales in the US-LAM, Europe, and Asia Pacific regions. Additionally, the company experienced a substantial 88% surge in net income, amounting to $15.8 million. Both fully diluted GAAP EPS and non-GAAP adjusted EPS witnessed considerable growth, with an 86% and 13% increase, respectively. However, despite these impressive results, Thermon Group Holdings, Inc. (NYSE:THR) reported a slight contraction in bookings, with a 1% decrease to $124.4 million and a book-to-bill ratio of 0.91x.

During Q4 2023, 15 out of the 933 hedge funds surveyed by Insider Monkey had invested in Thermon Group Holdings, Inc. (NYSE:THR). Among these investors, Jeffrey Moskowitz’s Harvey Partners emerged as the largest shareholder of the company. The fund holds a stake valued at $48.36 million, which is represented by ownership of 1.48 million shares.

7. iRobot Corporation (NASDAQ:IRBT)

Number of Hedge Fund Holders: 18

iRobot Corporation (NASDAQ:IRBT) specializes in smart home appliances, offering a range of robotic solutions including vacuum cleaners and floor mapping robots. It also provides handheld vacuum cleaners and a programmable platform for its robots.

On January 29, iRobot Corporation (NASDAQ:IRBT) unveiled an operational restructuring plan aimed at positioning the company for stability in the current market environment. The plan focuses on profitability and advancing growth initiatives to expand its market share in the mid-tier and premium segments. This decision came after iRobot and Amazon mutually agreed to terminate their previously announced merger agreement.

According to Insider Monkey’s database of 933 funds, 18 hedge funds held stakes in iRobot Corp (NASDAQ:IRBT).

iRobot Corporation (NASDAQ:IRBT) joins the ranks of Spectrum Brands Holdings, Inc. (NYSE:SPB), Amazon.com, Inc. (NASDAQ:AMZN), and Whirlpool Corporation (NYSE:WHR) as one of the best home appliance stocks to buy.

6. Spectrum Brands Holdings, Inc. (NYSE:SPB)

Number of Hedge Fund Holders: 25

Spectrum Brands Holdings, Inc. (NYSE:SPB) stands as a prominent player in the global home appliances market, distributing its products under well-known brands like Black & Decker and Remington. With its headquarters in Middleton, Wisconsin, the company demonstrated robust performance in the first quarter of 2024, surpassing analyst expectations for revenue and adjusted earnings per share by 2.8% and 102%, respectively.

Based on Insider Monkey’s fourth-quarter database, 25 hedge funds demonstrated bullish sentiment towards Spectrum Brands Holdings, Inc. (NYSE:SPB), reflecting a decrease from 31 funds in the preceding quarter.

Heartland Mid Cap Value Fund made the following comment about Spectrum Brands Holdings, Inc. (NYSE:SPB) in its Q3 2023 investor letter:

“Consumer Staples. During the quarter, we initiated a new position in Spectrum Brands Holdings, Inc. (NYSE:SPB), another deep value company with multiple self-help catalysts.

After several divestitures in recent years, Spectrum is mostly a pureplay Consumer Staples company focusing on pet care and home and garden supplies, including recognizable brands such as Spectracide lawn and garden products and SmartBone dog treats.

SPB is in the process of transforming itself from an acquisition-oriented holding company into an integrated operating company with sharper focus. As part of that process, the company recently divested its Hardware and Home Improvement segment, selling it to the Swedish conglomerate Assa Abloy for $4.3 billion in cash. We owned Spectrum when this divestiture was originally announced but exited our position when the Department of Justice (DOJ) sued to block the sale. That action threatened to derail SPB’s efforts to improve its balance sheet and shed a highly discretionary segment that was noncore to the company’s strategy.

We recently got clarity on this overhang, when the DOJ reached a settlement with Assa Abloy, allowing the sale to go through. This gives SPB ample capacity to repurchase shares at a steep discount to intrinsic value while setting the stage for operational improvements. Meanwhile, the stock trades at just 7X next year’s EBITDA and 5X to 5.5X normalized EBITDA.”

5. Modine Manufacturing Company (NYSE:MOD)

Number of Hedge Fund Holders: 28

Modine Manufacturing Company (NYSE:MOD) is an American firm headquartered in Racine, Wisconsin, specializing in the sale of heating products. Its diverse product portfolio includes furnaces, perimeter heating products, cabinet unit heaters, and fin tube radiators.

Based on Insider Monkey’s fourth-quarter database, 28 hedge funds demonstrated bullish sentiment towards Modine Manufacturing Company (NYSE:MOD), reflecting a slight decrease from 30 funds in the preceding quarter. Mario Gabelli’s GAMCO Investors emerged as the largest stakeholder of the company, holding 2.2 million shares valued at $132.49 million.

Carillon Chartwell Small Cap Value Fund made the following comment about Modine Manufacturing Company (NYSE:MOD) in its Q3 2023 investor letter:

“Modine Manufacturing Company (NYSE:MOD) was another strong performer. Modine’s performance technologies segment is experiencing high demand as it provides thermal solutions for electronic vehicle (EV) and hybrid vehicle manufacturers. The company also has focused on growth opportunities in the data-center market, selling data center cooling solutions needed for energy intensive artificial intelligence (AI) projects.”

4. Whirlpool Corporation (NYSE:WHR)

Number of Hedge Fund Holders: 30

Whirlpool Corporation (NYSE:WHR) is a leading manufacturer and distributor of home appliances and related products and services globally. Its product range includes refrigerators, freezers, ice makers, refrigerator water filters, and laundry appliances, catering to markets across North America, Europe, the Middle East, Africa, Latin America, and Asia.

On April 15, Whirlpool Corporation (NYSE:WHR) announced a quarterly dividend of $1.75 per share for its common stock. This dividend is scheduled to be paid on June 15, 2024, to shareholders of record as of the close of business on May 17, 2024.

According to data from Insider Monkey’s fourth-quarter database, investor sentiment towards Whirlpool Corporation (NYSE:WHR) improved, with 30 hedge funds showing bullish positions compared to 22 funds in the previous quarter. Lyrical Asset Management, led by Andrew Wellington and Jeff Keswin, held the largest stake in the company, with 1.03 million shares valued at $125.69 million.

3. Watsco, Inc. (NYSE:WSO)

Number of Hedge Fund Holders: 33

Watsco Inc (NYSE:WSO) specializes in selling a range of products including ducted and ductless residential air conditioners, replacement compressors, evaporator coils, furnaces, and related parts and supplies. Its consumer base spans the United States, Canada, Mexico, and Puerto Rico.

Recently, Watsco Inc (NYSE:WSO) declared a dividend of $2.7 per share, scheduled to be paid out on April 30, with the ex-dividend date set for April 12.

By the end of the fourth quarter of 2024, 33 hedge funds out of the 933 tracked by Insider Monkey held stakes in Watsco, Inc. (NYSE:WSO). The total value of their stakes was roughly $619.95 million.

2. Pentair plc (NYSE:PNR)

Number of Hedge Fund Holders: 35

Pentair plc (NYSE:PNR) is a provider of smart water solutions globally. Its Consumer Solutions segment focuses on manufacturing and distributing residential and commercial pool equipment, as well as water treatment products and systems. As of April 24, Pentair plc (NYSE:PNR) offers a quarterly dividend of $0.23 per share, resulting in a dividend yield of 1.16%. The company has consistently increased its dividends for the past 48 years.

In Insider Monkey’s database for December 2023, 35 hedge funds disclosed holdings in Pentair plc (NYSE:PNR), a slight decrease from the previous quarter’s 36 funds. These holdings collectively amount to over $1.8 billion in value. Notably, Impax Asset Management emerged as the top stakeholder in Q4, holding approximately 10 million shares.

1. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 293

Amazon.com, Inc. (NASDAQ:AMZN), a prominent American multinational technology company, has diversified its business interests over the years to include home appliances. These offerings include its own smart speaker called Alexa, a reading tablet called Kindle, and even a home robot called Astro.

In the December quarter of 2023, Insider Monkey’s research revealed that 293 out of the 933 hedge funds covered held a stake in the firm. Ken Fisher’s Fisher Asset Management emerged as the largest hedge fund investor in Amazon.com, Inc. (NASDAQ:AMZN), with a stake valued at $6.4 billion.

11 Best Home Appliance Stocks to Invest In

Published on April 27, 2024 at 9:02 am by Sheryar Siddiq in Hedge Funds, News

11. Hamilton Beach Brands Holding Company (NYSE:HBB)