We recently compiled a list of the 10 Best Heavy Equipment and Industrial Machinery Stocks to Buy. In this article, we are going to take a look at where Oshkosh Corporation (NYSE:OSK) stands against the other heavy equipment and industrial machinery stocks.

The industrial heavy equipment market includes machinery and tools used in construction, mining, agriculture, and industrial applications. According to 360iResearch, this sector is critically important for infrastructure development, mining operations, and large-scale agricultural productivity.

Growing infrastructural developments, rapid urbanization, and the growth of mining activities are fueling the necessity for heavy equipment. In agriculture, improved machinery efficiency remains critical for meeting global food demands. As per 360iResearch, market growth continues to be influenced by technological advancements like automation, loT integration, and sustainability trends focusing on fuel-efficient and electrically powered machinery.

Growth Drivers for the Heavy Equipment Market

Research Nester believes that the autonomous heavy equipment market was worth more than US$11.43 million in 2024 and should surpass US$26.56 million by 2037. The primary growth driver for the rapid expansion is the strong growth projected in the construction industry. The growth in the building and construction industry is aligned with the demand for heavy equipment.

Market experts opine that growth in the construction industry is expected to stem from lower interest rates in 2025. The types of heavy equipment that are used in the construction industry include earthmoving equipment, and material construction industry, among others.

READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.

Key Trends to Look Out For in 2025

As per Stumble Forward, the industrial machinery landscape has been witnessing a massive transformation. Technological advancements are taking place at a rapid pace, with manufacturers adopting cutting-edge tools and processes to beat the competition. Increased automation and robotics, Al integration, green manufacturing, and 3D printing for customization are the key trends likely to drive growth for the industrial machinery industry in 2025.

Automation in industrial machinery tends to reduce the chances of human error and supports streamlining production. Robots, together with machine learning, are being employed to inspect, assemble, and even pack goods. Stumble Forward went on to add that Al-powered systems can predict equipment failures, reducing unexpected costly repairs. This predictive maintenance technology should continue to help industries save thousands of dollars in repair costs.

In 2025, industrial machinery is expected to be designed in a way that will promote sustainability. Energy-efficient machines, including those running on renewable energy, or producing less waste, will be adopted. Finally, the adoption of 3D printing in industrial machinery, which can help produce parts that are lightweight yet incredibly strong, is expected to grow as manufacturers continue to realize its importance. Stumble Forward also added that the ability to print intricate designs should result in innovation, enabling engineers to test prototypes and adjust accordingly.

Our Methodology

To list the 10 Best Heavy Equipment and Industrial Machinery Stocks to Buy, we used a screener and sifted through online rankings. After getting a list of 25-30 stocks, we filtered out the ones having high hedge fund holdings. Finally, the stocks are arranged in ascending order of their hedge fund sentiments, as of Q3 2024.

At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

Oshkosh Corporation (NYSE:OSK)

Number of Hedge Fund Holders: 33

Oshkosh Corporation (NYSE:OSK) offers purpose-built vehicles and equipment worldwide. It operates through 3 segments: Access, Defense, and Vocational segments.

Oshkosh Corporation (NYSE:OSK) completed the acquisition of AUSA, a manufacturer of telehandlers, dumpers, and forklifts, improving its specialty equipment offerings. The company believes that the deal will ramp up its growth strategy and strengthen JLG’s equipment portfolio. Oshkosh Corporation (NYSE:OSK) owns JLG Industries, Inc., which is a manufacturer of mobile elevating work platforms (MEWPs) and telehandlers.

Oshkosh Corporation (NYSE:OSK)’s acquisition of AUSA should enhance JLG’s line of telehandlers and complement its line of tracked dumpers and forklifts. Apart from this, the acquisition provides Oshkosh Corporation (NYSE:OSK) access to niche markets.

Also, during Q3 2024, Oshkosh Corporation (NYSE:OSK) achieved a significant milestone as the US Postal Service (USPS) began placing its next-generation delivery vehicles, or NGDV, in service for last-mile delivery. This means that these vehicles are now actively being used to deliver mail and packages to customers as part of USPS’s daily operations. Beyond initial production, Oshkosh Corporation (NYSE:OSK) is expected to generate recurring revenue through parts, maintenance, and fleet management services for the USPS vehicles over their operational life. This provides strong revenue visibility for the company.

Aristotle Capital Management, LLC, an investment management company, released its Q2 2024 investor letter. Here is what the fund said:

Oshkosh Corporation (NYSE:OSK), a manufacturer of purpose‐built vehicles worldwide, was a main detractor during the quarter. Despite a decline in share price, the company has seen fundamental improvements and strong demand for its vehicles, including an increasing backlog of orders for fire trucks. As such, revenue for Oshkosh’s Vocational segment was up over 35% year‐over‐year. We believe this segment should be able to expand its margins, particularly as the company was awarded a contract to produce the “Next Generation Delivery Vehicle” for the U.S. Postal Service, which should begin to ramp up at the beginning of next year. This contract could generate in excess of $6 billion in revenue for the company. Furthermore, we continue to believe that Oshkosh is a high‐quality business that should be able to create innovative equipment and gain market share across segments. This includes its aerial work platforms as global safety standards increase around the world.

Overall OSK ranks 4th on our list of the best heavy equipment and industrial machinery stocks to buy. While we acknowledge the potential of OSK as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than OSK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None. This article is originally published at Insider Monkey.