In this article, we discuss the 10 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.
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“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 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, compared to 27 the preceding quarter worth $192 million.
Just like Apple Inc., Tesla, Inc., and NVIDIA Corporation, AGCO Corporation 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. 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., 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. 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., 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. was one of them. Here is what the fund said:
“CNH Industrial N.V., 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. 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. 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., 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., Tesla, Inc., and NVIDIA Corporation, 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.”
5. Generac Holdings Inc. (NYSE:GNRC)
Number of Hedge Fund Holders: 34
Generac Holdings Inc. (NYSE:GNRC) designs, manufactures, and sells power generation equipment, energy storage systems, and other power products. The firm features on the list of American manufacturing stocks to buy now as it markets engines, alternators, batteries, electronic controls, steel enclosures, and residential automatic standby generators, including the flagship Mobile Link, a remote monitoring system for home standby generators. The firm was founded in 1959 and is based in Wisconsin.
On August 8, JPMorgan analyst Mark maintained an Overweight rating on Generac Holdings Inc. stock and raised the price target to $421 from $415, noting the firm would benefit from the Inflation Reduction Act.
Among the hedge funds being tracked by Insider Monkey, London-based investment firm Impax Asset Management is a leading shareholder in Generac Holdings Inc., with 846,161 shares worth more than $177 million.
In its Q2 2021 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and Generac Holdings Inc. was one of them. Here is what the fund said:
“On a securities level, our top contributors (includes) Generac Holdings Inc.. All these businesses performed well fundamentally. For Generac, the leading provider of residential standby generators, fundamentals remained strong, but there was little to highlight from the quarter.”
4. Carrier Global Corporation (NYSE:CARR)
Number of Hedge Fund Holders: 41
Carrier Global Corporation (NYSE:CARR) provides heating, ventilating, and air conditioning (HVAC), refrigeration, fire, security, and building automation technologies worldwide. The company is one of the most prominent American manufacturing stocks to buy now. On July 28, the company posted earnings for the second quarter of 2022, reporting earnings per share of $0.69, beating market estimates by $0.07. The revenue over the period was $5.2 billion. On July 18, Mizuho analyst Brett Linzey maintained a Neutral rating on Carrier Global Corporation stock and lowered the price target to $38 from $45.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Carrier Global Corporation, with 6.67 million shares worth more than $238 million.
In its Q3 2021 investor letter, Davis Funds, an asset management firm, highlighted a few stocks and Carrier Global Corporation was one of them. Here is what the fund said:
“In the industrial space, we own a select list of well-entrenched market leaders, such as Carrier Global Corporation, a global leader in heating, ventilation and air conditioning (HVAC) solutions. These have recovered this year from their lulls in 2020, yet continue to trade at reasonable multiples of subdued earnings, creating a potential setup for the double play of recovering multiples on recovering earnings.”
3. Caterpillar Inc. (NYSE:CAT)
Number of Hedge Fund Holders: 45
Caterpillar Inc. (NYSE:CAT) manufactures and sells construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. The firm is among the best American manufacturing stocks to buy now. In late August, the company announced that it had signed a deal with BHP Group to replace the haul truck fleet of the latter at the Escondida copper mine in Chile. Under the deal, Caterpillar will deliver the first of its 798 AC electric trucks by the second half of next year. On August 3, UBS analyst Steven Fisher maintained a Buy rating on Caterpillar Inc. stock and lowered the price target to $225 from $250.
At the end of the second quarter of 2022, 45 hedge funds in the database of Insider Monkey held stakes worth $3.2 billion in Caterpillar Inc., compared to 54 in the previous quarter worth $4 billion.
In its Q1 2022 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and Caterpillar Inc. was one of them. Here is what the fund said:
“We also initiated a position in Caterpillar, one of the world’s leading manufacturers of construction and mining equipment. It’s a company we know well, as we have owned it in our large cap portfolio for quite some time. Recent share price weakness provided an opportunity for us to add it to our large cap concentrated portfolio at an attractive discount to our estimate of intrinsic value. We believe Caterpillar stands to benefit from increased capital investment supported by a healthier/recovering end market environment, particularly in construction and mining.”
2. Emerson Electric Co. (NYSE:EMR)
Number of Hedge Fund Holders: 47
Emerson Electric Co. (NYSE:EMR) provides various solutions for customers in the industrial, commercial, and residential markets. It is one of the top American manufacturing stocks to buy now. The company has an impressive dividend profile. It has consistently paid a dividend to shareholders for the past twenty-five years. These payouts have also registered consistent growth in these two decades. On August 2, the firm declared a quarterly dividend of $0.515 per share, in line with previous.
On August 16, Argus analyst John Eade maintained a Buy rating on Emerson Electric Co. stock and raised the price target to $98 from $95, appreciating the earnings beat and strong balance sheet of the firm.
Among the hedge funds being tracked by Insider Monkey, Washington-based firm Citadel Investment Group is a leading shareholder in Emerson Electric Co., with 9.2 million shares worth more than $233 million.
1. Deere and Company (NYSE:DE)
Number of Hedge Fund Holders: 54
Deere and Company (NYSE:DE) manufactures and distributes various equipment worldwide. It is one of the elite American manufacturing stocks to buy now. On September 12, The Wall Street Journal reported that the company will generate 10% of yearly revenue from software fees by the end of the decade as its farm machinery becomes more technologically advanced. The statement was made by John May, chief executive of Deere and Company, in the publication.
On August 24, Argus analyst John Eade maintained a Buy rating on Deere and Company stock and raised the price target to $420 from $390, noting that the earnings of the firm appeared to be back in growth mode.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Deere and Company, with 1.5 million shares worth more than $458 million.
In its Q2 2022 investor letter, LRT Capital Management, an asset management firm, highlighted a few stocks and Deere and Company was one of them. Here is what the fund said:
“Deere & Company manufactures machines and equipment, which help the agriculture and construction industries. The company’s production and precision agriculture segment manufacture global equipment and technology solutions for production-scale growers of large grains, small grains, cotton, and sugar. The small agriculture and turf segment develops equipment for dairy and livestock producers, crop producers, and turf and utility customers. Finally, the construction and forestry segment make a range of machines for the earthmoving, forestry, and roadbuilding production systems (…read more)
You can also take a peek at 13 Best Hemp Stocks to Buy Now and Billionaire Dan Loeb’s Top 10 Stock Picks.
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This article is originally published at Insider Monkey.
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