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 AGCO Corporation (NYSE:AGCO) 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.
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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).
A farmer surrounded by a field of crops, his tractor parked in the background.
AGCO Corporation (NYSE:AGCO)
Number of Hedge Fund Holders: 18
AGCO Corporation (NYSE:AGCO) manufactures and distributes agricultural equipment and related replacement parts worldwide.
AGCO Corporation (NYSE:AGCO)’s product portfolio, consisting of tractors and combines, continues to experience varying levels of market sentiment. Wall Street believes that dealers have been quite reluctant to place new orders. This momentum might have a trickle-down effect on other product lines, weighing 4WD tractors over the upcoming 6 – 9 months. However, in a bid to address these challenges, AGCO Corporation (NYSE:AGCO) announced a significant 25% planned production cut for Q4 2024. This decision is expected to align production with current market demand and manage inventory levels effectively.
Furthermore, AGCO Corporation (NYSE:AGCO) remains focused on European developments, mainly regarding pricing strategies and potential market share gains. Such initiatives are expected to provide avenues for growth.
The company’s growth strategies include Fendt brand expansion, precision agriculture, and parts business. Fendt is a brand under AGCO Corporation (NYSE:AGCO) and is a leading manufacturer of high-performance agricultural machinery. Products include tractors, harvesters, and loader wagons, among others. Fendt’s improved distribution and technology-rich product line continues to translate into improved market share, mainly in Europe.
AGCO Corporation (NYSE:AGCO) continues to work to expand Fendt’s market share beyond its stronghold in Europe. This includes increasing dealership networks in the US and Canada and targeting growth in emerging markets such as Brazil, India, and China, where demand for modern agricultural machinery continues to rise.
Overall AGCO ranks 8th on our list of the best heavy equipment and industrial machinery stocks to buy. While we acknowledge the potential of AGCO 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 AGCO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.