“Still Optimistic”: 10 American Manufacturing Stocks to Buy Now

Published on September 23, 2022 at 9:03 am by Usman Kabir in Hedge Funds, News

In this article, we discuss the 10 American manufacturing stocks to buy now. If you want to read about some more American manufacturing stocks, go directly to 5 American Manufacturing Stocks to Buy Now.

Much has been made of the incredible strides that the manufacturing sectors of countries like China and India have displayed in the past few years, eclipsing the highs of the American and European industries of the past. This shift from the West to the East has left American factories reeling and the administration of US President Biden has pledged to bring jobs back to the US, passing a multi-trillion dollar infrastructure bill in this regard recently. Investors have already started preparing for the overhaul and rebound in US manufacturing.

According to a report by the management consulting firm McKinsey, American manufacturing accounts for $2.3 trillion of the Gross Domestic Product, employs 12 million people, and supports hundreds of local economies. It also has a disproportionate economic contribution, including 20% of the capital investment, 35% of productivity growth, 60% of exports, and 70% of business research spending. Top stocks in this sector include Apple Inc. (NASDAQ:AAPL), Tesla, Inc. (NASDAQ:TSLA), and NVIDIA Corporation (NASDAQ:NVDA).

On September 19, Jay Timmons, president and CEO of the National Association of Manufacturers, appeared on news platform CNBC to discuss the manufacturing sector. Timmons was of the opinion that the government was betting on the future of US manufacturing and it was a “good thing” but he noted that these were “long term investments”. Timmons observed that despite headwinds in the sector, like supply chain shortages, workforce challenges, and inflationary pressures, manufacturers were “still optimistic” about the future of their business.

Our Methodology

The companies that operate in the manufacturing sector were selected for the list. In order to provide readers with some context for their investment choices, the business fundamentals and analyst ratings for the stocks are also discussed. Data from around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.

Suwin/Shutterstock.com

“Still Optimistic”: American Manufacturing Stocks to Buy Now

10. AGCO Corporation (NYSE:AGCO)

Number of Hedge Fund Holders: 21

AGCO Corporation (NYSE:AGCO) manufactures and distributes agricultural equipment and related replacement parts worldwide. The firm features on the list of American manufacturing stocks to buy now as it markets horsepower tractors for row crop production, soil cultivation, planting, land leveling, and other purposes. It also provides grain storage bins and related drying and handling equipment systems. It offers combines for harvesting grain crops as well. The firm owns the Challenger, Fendt, GSI, Massey Ferguson, and Valtra brands.

On July 15, Jefferies analyst Stephen Volkmann maintained a Buy rating on AGCO Corporation (NYSE:AGCO) stock and lowered the price target to $150 from $170, noting that the stronger outlook in the machinery sector was likely to be sold fairly quickly.

At the end of the second quarter of 2022, 21 hedge funds in the database of Insider Monkey held stakes worth $120 million in AGCO Corporation (NYSE:AGCO), compared to 27 the preceding quarter worth $192 million.

Just like Apple Inc. (NASDAQ:AAPL), Tesla, Inc. (NASDAQ:TSLA), and NVIDIA Corporation (NASDAQ:NVDA), AGCO Corporation (NYSE:AGCO) is one of the American manufacturing stocks to buy now.

9. Kennametal Inc. (NYSE:KMT)

Number of Hedge Fund Holders: 21

Kennametal Inc. (NYSE:KMT) engages in the development and application of tungsten carbides, ceramics, and super-hard materials and similar solutions. The company is one of the most prominent American manufacturing stocks to buy now. On August 1, the company posted earnings for the fourth fiscal quarter, reporting earnings per share of $0.53, beating market estimates by $0.07. The revenue over the period was $530 million, up more than 2% compared to the revenue over the same period last year and beating analyst estimates by $13 million. On July 7, Loop Capital analyst Chris Dankert maintained a Hold rating on Kennametal Inc. (NYSE:KMT) stock and lowered the price target to $22 from $29.

Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Ariel Investment is a leading shareholder in Kennametal Inc. (NYSE:KMT), with 10.6 million shares worth more than $246 million.

8. CNH Industrial N.V. (NYSE:CNHI)

Number of Hedge Fund Holders: 25

CNH Industrial N.V. (NYSE:CNHI) designs, produces, markets, sells, and finances agricultural and construction equipment and vehicles. On July 29, the company posted earnings for the second quarter of 2022, reporting earnings per share of $0.43, beating market estimates by $0.06. The revenue over the period was $6 billion, up over 17% compared to the revenue in the same period last year and beating analyst estimates by $510 million.

On August 1, Deutsche Bank analyst Nicole DeBlase maintained a Buy rating on CNH Industrial N.V. (NYSE:CNHI) stock and raised the firm price target to $17 to $16, noting that the firm had a strong quarter and the updated projection provides space for growth.

Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Harris Associates is a leading shareholder in CNH Industrial N.V. (NYSE:CNHI), with 98 million shares worth more than $1.1 billion.

In its Q4 2021 investor letter, Longleaf Partners Fund, an asset management firm, highlighted a few stocks and CNH Industrial N.V. (NYSE:CNHI) was one of them. Here is what the fund said:

“CNH Industrial N.V. (NYSE:CNHI), a leading farm equipment and commercial vehicle manufacturer globally, was another top performer for the year. CNH reported strong results throughout the year, beating our initial conservative expectations. The US agricultural cycle has been firmly in the company’s favor, driven by commodity price strength, healthy farm balance sheets, advanced technology adoption, and aging fleets feeding replacement demand. We believe we are past the mid-cycle but expect the strong upcycle to continue with the solid order books and strong visibility. On December 31, 2021, CNHI completed the demerger of its on-highway business, which includes its IVECO commercial vehicles and FPT powertrain businesses. This transaction creates a pure play off-highway company comprising the higher-multiple agricultural, construction and specialty vehicle businesses. We expect a narrowing of the discount to the net asset value once we have two focused companies valued at peer multiples.”

7. Plug Power Inc. (NASDAQ:PLUG)

Number of Hedge Fund Holders: 26

Plug Power Inc. (NASDAQ:PLUG) delivers end-to-end clean hydrogen and zero-emissions fuel cell solutions for various sectors. It is one of the top American manufacturing stocks to buy now. On September 8, the company announced that it had secured its largest multi-site electrolyzer order in Europe to date. A firm called Lhyfe placed an order for ten 5MW PEM electrolyzer systems for production of green hydrogen across multiple plants. The electrolyzers will be assembled in Europe.

On August 26, Craig-Hallum analyst Eric Stine maintained a Buy rating on Plug Power Inc. (NASDAQ:PLUG) stock and raised the price target to $38 from $31, lauding the green hydrogen supply arrangement of the firm with Amazon.

At the end of the second quarter of 2022, 26 hedge funds in the database of Insider Monkey held stakes worth $259 million in Plug Power Inc. (NASDAQ:PLUG), compared to 33 in the preceding quarter worth $509.8 million.

6. Johnson Controls International plc (NYSE:JCI)

Number of Hedge Fund Holders: 33

Johnson Control International plc (NYSE:JCI) engages in engineering, manufacturing, commissioning, and retrofitting building products and systems. It is one of the elite American manufacturing stocks to buy now. The company has an impressive dividend profile. It has consistently paid a dividend to shareholders for the past five years. These payouts have also registered growth in the past year. On September 14, the firm declared a quarterly dividend of $0.35 per share, in line with previous.

On August 18, Mizuho analyst Brett Linzey maintained a Buy rating on Johnson Control International plc (NYSE:JCI) stock and lowered the price target to $65 to $68, noting that orders will decelerate for industrial enterprises when consumer ordering habits become common.

At the end of the second quarter of 2022, 33 hedge funds in the database of Insider Monkey held stakes worth $603.6 million in Johnson Control International plc (NYSE:JCI), compared to 44 in the preceding quarter worth $1.4 billion.

In addition to Apple Inc. (NASDAQ:AAPL), Tesla, Inc. (NASDAQ:TSLA), and NVIDIA Corporation (NASDAQ:NVDA), Johnson Control International plc (NYSE:JCI) is one of the American manufacturing stocks on the radar of smart investors.

In its Q1 2022 investor letter, Aristotle Capital Management, an asset management firm, highlighted a few stocks and Johnson Control International plc (NYSE:JCI) was one of them. Here is what the fund said:

“As investors since the fourth quarter of 2017, we have enjoyed a front-row view of the large transformation that has taken place at Johnson Control International plc (NYSE:JCI). Once a multi-industrial corporation, the company successfully turned itself into a pure-play buildings solutions and technology provider. Catalysts we previously identified for Johnson Controls included synergies following its merger with Tyco International, which provides fire safety and building security products, as well as benefits from its separation of non-building-focused businesses, such as automotive seating and batteries. With all catalysts in sight now nearing completion, and Johnson Controls now a better business for it – with higher recurring revenues and lower capital intensity – we decided to exit our investment to help fund the purchases of Xcel Energy and Atmos Energy.”

Click to continue reading and see 5 American Manufacturing Stocks to Buy Now.

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