12 Best Nickel Stocks to Buy According to Hedge Funds

5. Leggett & Platt, Incorporated (NYSE:LEG)

Number of Hedge Fund Holders: 31

Leggett & Platt, Incorporated (NYSE:LEG) is a diversified manufacturer that produces a wide range of goods for homes, offices, and automobiles. Among the most significant raw materials utilized by the company are high-strength metals, titanium and nickel-based alloys, chemicals used in the creation of foam, and others. It is ranked fifth on our list of the Best Nickel Stocks.

Since gaining more leverage through the 2019 acquisition of foam mattress provider ECS, the company has encountered numerous difficulties. The company’s gross margins fell by 450 basis points, from 21.85% in Q2 2021 to 17.4% currently. Additionally, there has been a decline in demand for bedding (28% since 2021), furniture/flooring/textiles (16.7% since 2022), and automobiles (down 5% in 2023). Leggett & Platt, Incorporated (NYSE:LEG) continued to pay its $220 million yearly dividend despite these challenges, which made its debt situation worse and increased its net debt to EBITDA ratio to 4.75 times.

The management is reorganizing the company, intending to permanently reduce costs by $60-$70 million through workforce reductions, facility consolidations, and operational efficiency. Furthermore, the business has cut the majority of its dividend, freeing approximately $220 million a year. In 2025, it anticipates receiving $240 million in after-tax profits from the sale of its aerospace division. By 2026, the firm also expects to make between $60 and $80 million from real estate transactions. Leggett & Platt, Incorporated (NYSE:LEG) has already paid down $126 million in debt as of 2024. To align his interests with those of shareholders, CEO Karl Glassman, who holds roughly 0.9% of the shares, has incentives related to EBITDA, free cash flow, ROIC, and total shareholder return.