Hedge Funds Love These Industrial Goods Stocks

|
 |  Includes: BA, CAT, GE, IR, LMT, MMM, TYC
by: Insider Monkey

The Industrial Goods Sector includes waste management, aerospace defense, industrial equipment and residential construction – in other words, the companies in this sector are the opposite of consumer goods. This is generally a cyclical industry and we believe this is the right time to be invested in cyclical businesses. Stocks are priced for a possible recession, yet the economists are expecting around a 3% GDP growth rate for the fourth quarter. Of course, it can be difficult for investors to know which stocks to buy in this sector. With this in mind, we developed a list of industrial goods stocks hedge fund managers love. It can be used as a starting point for your research.

General Electric Co. (NYSE:GE): Of the 300+ hedge funds we track, 44 owned a position in GE at the end of the third quarter. The total amount invested by these hedge funds was $1.49 billion. This is down from 46 hedge funds invested in the company, for a total of $2.01 billion at the end of the second quarter. Hedge funds with positions in GE include Ken Fisher’s Fisher Asset Management, Warren Buffett’s Berkshire Hathaway, Tom Gayner’s Markel Gayner Asset Management, David Dreman’s Dreman Value Management and Ray Dalio’s Bridgewater Associates.

Tyco International Ltd. (NYSE:TYC): Hedge fund interest in TYC increased in the third quarter – 55 funds had positions in the company at the end of September compared to 49 at the end of June. The relative volume of that interest decreased though, moving from $2.13 billion at the end of the second quarter to $2.02 billion at the end of the third quarter. Lee Ainslie’s Maverick Capital, George Soros’ Soros Fund Management, Jean-Marie Eveillard’s First Eagle Investment and Ray Dalio’s Bridgewater Associates each had positions in the company at the end of September.

Lockheed Martin Corp. (NYSE:LMT): LMT was a popular stock with hedge funds during the third quarter – 30 had positions in the company at the end of September. The total value of those positions was $887.40 million. Interest in the company waned a bit from the second quarter – 34 hedge funds had positions in the company at the end of June-- a combined value of $977.12 million. Hedge funds with a position in LMT as of the end of the third quarter include Jean-Marie Eveillard’s First Eagle Investment, Ray Dalio’s Bridgewater Associates and George Soros’ Soros Fund Management.

3M Co. (NYSE:MMM): At the end of the third quarter, 28 hedge funds had positions in MMM, down from 30 at the end of the second quarter. The total amount invested in MMM by the hedge funds we track totaled $1.10 billion at the end of September, compared to $1.58 billion at the end of June. Jean-Marie Eveillard’s First Eagle Investment had nearly 2 percent in MMM at the end of the third quarter. Ray Dalio’s Bridgewater Associates, David Dreman’s Dreman Value Management and Ken Fisher’s Fisher Asset Management also had positions in the company.

IngersollRand (NYSE:IR): Hedge fund interest in this stock declined sharply in the third quarter, moving from 23 hedge funds invested at the end of the second quarter to 20 at the end of the third. The total position amongst hedge funds also decreased, from $698.39 million at the end of June to $266.26 million at the end of September. Mason Hawkins Southeastern Asset Management was a fan of IR at the end of third quarter, as was Jean-Marie Eveillard’s First Eagle Investment, Warren Buffett’s Berkshire Hathaway and Ken Fisher’s Fisher Asset Management.

Caterpillar Inc. (NYSE:CAT): CAT was popular with 33 hedge fund managers at the end of the third quarter, for a total $1.09 billion. While $1.09 billion is no small amount, it represents a sharp decrease from the second quarter, when 40 hedge funds had $1.72 billion invested in the company. Ken Fisher’s Fisher Asset Management, Tom Gayner’s Markel Gayner Asset Management and Ray Dalio’s Bridgewater Associates were fans of the company as of the end of September.

The last industrial goods stock we have in our list is Boeing (NYSE:BA). There were 28 hedge funds with bullish positions in BA at the end of September. Unfortunately, this is a decline of 8 hedge funds from the end of the second quarter. Phil Gross' Adage Capital, Michael Messner's Seminole Capital, and Steve Cohen's SAC Capital had large positions in BA at the end of September.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.