Billionaire Ken Fisher’s 10 Industrial Stock Picks with Huge Upside Potential

7. Emerson Electric Co. (NYSE:EMR)

Number of Hedge Fund Holders: 41

Upside Potential: 22.01%

Emerson Electric Co. (NYSE:EMR) develops automation technology and software for industries such as process control, discrete manufacturing, instrumentation, and asset management. Working through seven specialized divisions, the company tackles global needs for energy efficiency and digital transformation.

For Q1 2025 ended December 31, 2024, Emerson beat earnings forecasts with $1.38 per share, above the $1.28 analysts expected. Emerson Electric Co. (NYSE:EMR) achieved record gross margins of 53.5% and adjusted segment EBITDA margins of 28%, up 340 basis points from last year. The company’s free cash flow nearly doubled to $694 million thanks to cost-cutting and better margins. Although its discrete business fell 4%, while process and hybrid segments grew 5%, and software and control rose 4%. Emerson Electric also bought back $1 billion in shares during the quarter.

Moreover, Emerson saw strong results in the US and the Middle East, but China remained weak, especially in manufacturing and chemicals. Emerson Electric Co. (NYSE:EMR) built up an $11.5 billion project pipeline and continues its focus on LNG, power, and semiconductor markets as key growth areas. It expects over $1 billion in future LNG orders and added $300 million in semiconductor opportunities. The company’s growth plans include acquiring AspenTech and opening a new headquarters in St. Louis.

Despite some regional challenges, Emerson Electric Co. (NYSE:EMR) remains a solid industrial tech investment due to strong cash flow and growing digital offerings. Ken Fisher owns about $252.3 million in Emerson shares, making up 0.1% of his fund’s holdings.

The company aims for high-70% operating leverage (up from mid-40% last year) and plans to return $3.2 billion to shareholders through dividends and buybacks.