Is Comfort Systems USA (FIX) A Small-Cap Construction and Materials Stock Hedge Funds Are Buying?
We recently published a list of the 15 Small-Cap Construction and Materials Stocks Hedge Funds Are Buying. In this article, we are going to take a look at where Comfort Systems USA, Inc. (NYSE:FIX) stands against other small-cap construction and materials stocks.
Saira Malik, Nuveen's head of equities and fixed income, joined 'Closing Bell' on CNBC on March 26 to discuss her investment strategy in the middle of this uncertain market. She emphasized that two dominant themes are shaping the second quarter of this year: policy uncertainty and questions surrounding the pace of the economic slowdown. Malik noted that markets have shown a little optimism after a rebound from correction territory. This was driven by investor expectations of watered-down tariffs and the return of the term 'transitory' regarding inflation effects from tariffs. However, she highlighted that the economy continues to slow. Given this, Malik prefers defensive market sectors, particularly infrastructure. She also identified municipal bonds as a favored fixed-income category.
These appeal to local investors who seek stable income streams in the middle of this economic uncertainty. Malik also acknowledged the risk that continued negative sentiment about consumer weakness could become a self-fulfilling prophecy. She pointed out that the economy's recent strength has been driven by consumer spending and employment, with about half of payroll growth since 2019 coming from government jobs. The recent data on consumer spending, retail sales, and confidence have been weak, but consumers often express pessimism without reducing spending proportionally. Despite this, she stressed that the economy is slowing and warned that ongoing tariff uncertainty could cause a sharper economic downturn. However, she also mentioned potential upside from forthcoming tax cuts and deregulation, which could provide economic support. Malik explained that the market's recent optimism comes from increasing clarity about tariff implementation and targets.
We first sifted through financial media reports, ETFs, and Insider Monkey's Q4 2024 hedge funds database reports to compile a list of the small-cap construction and materials stocks hedge funds are buying. For this article, we define small-cap stocks as those that trade between $10 billion and $30 billion, as of April 28. We then selected the top 15 stocks and ranked them in ascending order of the number of hedge funds that have stakes in them. In cases where an equal number of hedge funds held two or more stocks, we used the market cap as a tiebreaker.
Why are we interested in 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
An engineer inspecting a newly renovated electrical installation.
Market Capitalization as of April 28: $13.78 billion
Number of Hedge Fund Holders: 50
Comfort Systems USA, Inc. (NYSE:FIX) is a construction services company that provides mechanical and electrical installation, renovation, maintenance, repair, and replacement services. It serves the mechanical and electrical services industry in the US. It operates through two segments: Mechanical and Electrical.
In Q1 2025, Comfort Systems (NYSE:FIX) made $1.83 billion in revenue, which was up 19.15% year-over-year. The Industrial sector accounted for 62% of this total revenue. Within this sector, Advanced Technology, which includes data centers and chip fabrication facilities, stands out as the largest component of overall revenue at 37%.
This indicates that advanced technology projects are currently the single largest contributor to Comfort Systems' top line. Q1 2025 saw particularly strong bookings within the technology sub-sector of the Industrial market. Comfort Systems USA, Inc. (NYSE:FIX) anticipates continued strong demand from its tech customers and across the broader Industrial sector, which will contribute to the company's optimistic outlook for 2025 and into 2026.
Overall, FIX ranks 3rd on our list of the small-cap construction and materials stocks hedge funds are buying. While we acknowledge the growth potential of FIX, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than FIX but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
31 minutes ago
- Yahoo
5 Cybersecurity Stocks You Can Buy and Hold for the Next Decade
Breaches have become too costly for companies not to invest in top-tier protection. Cybersecurity comes in several flavors, offering a range of choices for investors. The five stocks below offer broad industry exposure -- and should thrive over time. 10 stocks we like better than Palo Alto Networks › Security has become mission-critical to companies in an increasingly digital and technology-driven world. The consequences of failure are costly. An annual report by International Business Machines estimates that the typical breach can cost companies $4.9 million in damages. Therefore, it should come as no surprise that cybersecurity is a hot topic in the stock market. Research from Roots Analysis estimates that the global cybersecurity market will grow from $215 billion last year to $697 billion by 2035, representing an 11.3% annualized growth rate over the next decade. But don't look to the antivirus programs your parents used on their computers in the late 1990s. Today, a new crop of next-generation security companies is taking over the field. Here are five cybersecurity stocks to consider buying and holding for the next decade. A highly connected world creates security vulnerabilities. That's where Palo Alto Networks (NASDAQ: PANW) comes in. The company specializes in firewall technology, which acts like a security guard on a network, monitoring what is trying to get in, and stopping suspicious actors. The company has expanded into cloud security and integrated artificial intelligence (AI), a common theme on this list, to improve its protection. It is one of the largest dedicated cybersecurity companies and is driving growth by transitioning its business model from selling specific solutions tailored to individual customer needs to a platform strategy. Analysts estimate that Palo Alto Networks will continue to grow its earnings by an average of 20% annually over the long term, as spending across the broader security market increases. It's hard to discuss cutting-edge security without including CrowdStrike Holdings (NASDAQ: CRWD). The company has garnered recognition for its endpoint security, which protects connected devices (endpoints) in a network, such as laptops or smart devices. It has expanded to become a comprehensive security platform with enhanced capabilities, sold to customers as product modules. Cross-selling has driven staggering growth for CrowdStrike. Today, nearly a quarter of its customers use at least eight product modules. And with just $4.4 billion in annual recurring revenue, there is still ample room for growth. The company's success has fetched a lofty price-to-sales ratio (P/S) of 28, but it could be worth nibbling on and adding more aggressively on dips. CrowdStrike is on its way to becoming a substantial business. The internet runs on massive content delivery networks (CDN), and Cloudflare (NYSE: NET) is one of the largest. Beyond powering the internet, it helps secure it by mitigating distributed denial-of-service (DDoS) threats, a type of cyberattack where malicious traffic floods a site, slowing it or crashing it altogether. The company has over 250,000 paying customers, and its network is a great distribution tool for products and services. Its global CDN coverage also makes it a player in edge computing, where companies bring computing resources out of centralized cloud centers to localized locations to improve performance and speed. Think upcoming opportunities like autonomous vehicles and robotics, where secure, fast connections will be crucial for the technology to work at scale. Security technology often flags potential threats that a human analyst then reviews and assesses. SentinelOne (NYSE: S) uses AI to detect and deter cyberthreats autonomously. As a direct competitor to CrowdStrike, it also specializes in endpoint security and has received praise for its high-level technology capabilities. SentinelOne is smaller than its archrival and isn't yet profitable. However, it benefits from the same big-picture growth trends as the others on this list, and its P/S of 6.7 makes it arguably the bargain among this group. Sometimes, you don't need to be the biggest to be successful. The stock could have tremendous long-term upside from here. Cybersecurity isn't among the things investors associate with Microsoft (NASDAQ: MSFT), but make no mistake, the technology giant is a colossal presence in the industry. It builds security products and services into its Windows operating software, protecting millions of Windows computers and devices worldwide. Microsoft is involved with various technology end markets, so this is far more than a cybersecurity investment. The company's exposure to AI, cloud computing, and enterprise software -- as well as Windows and Microsoft 365 productivity software -- makes it a well-rounded bet on the broader technology sector. That's worth holding as an anchor for a growth-focused portfolio. Before you buy stock in Palo Alto Networks, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Palo Alto Networks wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $660,341!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $874,192!* Now, it's worth noting Stock Advisor's total average return is 999% — a market-crushing outperformance compared to 173% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cloudflare, CrowdStrike, International Business Machines, and Microsoft. The Motley Fool recommends Palo Alto Networks and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. 5 Cybersecurity Stocks You Can Buy and Hold for the Next Decade was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
40 minutes ago
- Yahoo
Liberty Energy's (NYSE:LBRT) investors will be pleased with their impressive 110% return over the last five years
It hasn't been the best quarter for Liberty Energy Inc. (NYSE:LBRT) shareholders, since the share price has fallen 11% in that time. But that doesn't change the fact that shareholders have received really good returns over the last five years. In fact, the share price is 101% higher today. To some, the recent pullback wouldn't be surprising after such a fast rise. Of course, that doesn't necessarily mean it's cheap now. Unfortunately not all shareholders will have held it for the long term, so spare a thought for those caught in the 44% decline over the last twelve months. With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price. During the last half decade, Liberty Energy became profitable. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains. You can see how EPS has changed over time in the image below (click on the chart to see the exact values). We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.. As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Liberty Energy's TSR for the last 5 years was 110%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence! Liberty Energy shareholders are down 43% for the year (even including dividends), but the market itself is up 14%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn't be so upset, since they would have made 16%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Liberty Energy better, we need to consider many other factors. Even so, be aware that Liberty Energy is showing 4 warning signs in our investment analysis , and 1 of those is concerning... But note: Liberty Energy may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast). Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
40 minutes ago
- Yahoo
Quanex Building Products Corporation Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year
Quanex Building Products Corporation (NYSE:NX) just released its second-quarter report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 3.0% to hit US$452m. Quanex Building Products also reported a statutory profit of US$0.44, which was an impressive 54% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Quanex Building Products after the latest results. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. Taking into account the latest results, the most recent consensus for Quanex Building Products from four analysts is for revenues of US$1.85b in 2025. If met, it would imply a meaningful 14% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 323% to US$1.58. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.85b and earnings per share (EPS) of US$1.48 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates. See our latest analysis for Quanex Building Products The consensus price target was unchanged at US$33.75, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Quanex Building Products analyst has a price target of US$38.00 per share, while the most pessimistic values it at US$28.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth. One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Quanex Building Products' growth to accelerate, with the forecast 29% annualised growth to the end of 2025 ranking favourably alongside historical growth of 9.0% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.4% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Quanex Building Products to grow faster than the wider industry. The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Quanex Building Products following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates. With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Quanex Building Products going out to 2026, and you can see them free on our platform here.. Don't forget that there may still be risks. For instance, we've identified 4 warning signs for Quanex Building Products (2 can't be ignored) you should be aware of. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
