In this article we discuss the 5 best automation stocks for 2021. If you want to read our detailed analysis of these companies, go directly to the 10 Best Automation Stocks For 2021.
5. Eaton Corporation plc (NYSE: ETN)
Number of Hedge Fund Holders: 41
Market Cap: $57.346 billion
Eaton is Dublin-based power management company that has become a leader in industrial automation. It provides sensors, switches, and automated factory equipment to do things such as improve power management and maintain equipment before anything breaks down. The company has signed an agreement to acquire a 50 percent stake in Jiangsu YiNeng Electric’s busway business which manufactures and markets busway products in China. The company’s quarterly earnings report shows earnings per share of $0.13 and 20.7% operating margins which was up 130 basis points in 2020 compared to the same quarter of 2019. Eaton’s 2020 revenues were $17.9 billion, and its products were used in more than 175 countries worldwide. It is one of the best automation stocks to look out for in 2021.
With a $161.5 million stake in Eaton Corp., Ken Griffin’s Citadel Investment Group owns 1.3 million shares of the company as of the end of the fourth quarter of 2020. Our database shows that 41 hedge funds held stakes in ETN as of the end of the fourth quarter, versus 35 funds in the third quarter.
Sound Shore Management, in their Q4 2020 investor letter, mentioned Eaton Corporation plc (NYSE: ETN). Here is what Sound Shore Management has to say about Eaton Corporation plc in their Q4 2020 investor letter:
“Similarly, our investment in Eaton is another great Sound Shore case study. Eaton is an electrical equipment maker that we were able to purchase in 2018 when it was trading below normal at 13 times earnings. The stock gained 31% in 2020 and outperformed its industrial peers. Over the last ten years, Eaton has methodically repositioned its business mix to a high value-add, electrical parts and aerospace business that now represents greater than 75% of operating earnings. This transformation has positioned the company well for the surge in demand for electric energy efficiency and environmentally friendly solutions. In addition, Eaton’s experienced management is focused on capital efficiency and has executed on improving organic revenue growth and improved profitability. The company is generating substantial free cash flow and has returned 6% of capital to shareholders through dividends and buybacks for the year. Even after the stock’s recent performance, it is still reasonably valued on free cash flow and remains a holding.”