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 PACCAR Inc (NASDAQ:PCAR) 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 fleet of trucks travelling on a highway, emphasizing the transportation Services provided by the organization.
PACCAR Inc (NASDAQ:PCAR)
Number of Hedge Fund Holders: 30
PACCAR Inc (NASDAQ:PCAR) designs, manufactures and distributes light, medium, and heavy-duty commercial trucks.
Wall Street analysts believe that PACCAR Inc (NASDAQ: PCAR)’s growth prospects are expected to be fueled by an increase in emission pre-buy activities. An emission pre-buy is a phenomenon in which truck buyers accelerate purchases of vehicles ahead of the implementation of stricter emission regulations. The majority of PACCAR Inc (NASDAQ:PCAR)’s trucks are equipped with engines from Cummins, placing it to potentially capitalize on regulatory changes.
Cummins is a leader in developing engines that meet or exceed stringent global standards. By equipping trucks with Cummins engines, PACCAR Inc (NASDAQ:PCAR) ensures that its vehicles remain compliant. Also, PACCAR Inc (NASDAQ:PCAR) made some significant moves. It announced the sale of its subsidiary, PACCAR Winch Inc., to a wholly-owned subsidiary of Black Phoenix Group. This move forms part of the company’s ongoing efforts to optimize its portfolio and enhance shareholder value. This transaction aligns with the broader industry trend of companies emphasizing their core competencies and growth opportunities.
PACCAR Inc (NASDAQ:PCAR)’s core areas include trucks, parts, and emerging technologies such as electric and autonomous vehicles. Madison Investments, an investment advisor, released its Q3 2024 investor letter. Here is what the fund said:
“The bottom five detractors for the quarter were Dollar Tree, MKS Instruments, PACCAR Inc (NASDAQ:PCAR), Copart, and Amphenol. After initially holding up well against declining freight rates and a softening economic backdrop, sales at truck manufacturer PACCAR have begun to weaken. We think the company’s high-margin, stable aftermarket parts division will offer some support through the current cyclical downturn.”
Overall PCAR ranks 5th on our list of the best heavy equipment and industrial machinery stocks to buy. While we acknowledge the potential of PCAR 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 PCAR 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.