Emerson Electric Co. (EMR): Among Billionaire Ken Fisher's Industrial Stock Picks with Huge Upside Potential
We recently published a list of . In this article, we are going to take a look at where Emerson Electric Co. (NYSE:EMR) stands against other billionaire Ken Fisher's industrial stock picks with huge upside potential.
The economy strongly influences industrial stocks, which have fallen during recent downturns. However, 2025 looks like a key year for this sector, with these companies working in manufacturing, shipping, and aerospace, and investors are now focusing on businesses that adapt quickly to global shifts. The industrial sector grew 26% in 2024, showing strength despite high inflation and weak global demand. Going into 2025, these stocks are getting more attention thanks to new growth drivers and better economic conditions.
Even with possible higher tariffs under Trump's trade policies, the outlook remains positive. President Trump has proposed a 25% tariff on steel and aluminum from countries like South Korea, Vietnam, and Canada. These tariffs might raise costs and also boost U.S. infrastructure and manufacturing spending; as Canada's Innovation Minister Francois-Philippe Champagne said,
'Canadian steel and aluminum support key industries in the U.S., from defense, shipbuilding, and auto. We will continue to stand up for Canada, our workers, and our industries.'
All in all, this trade shift could help American industrial companies, especially those bringing supply chains back home.
Moreover, lower interest rates should help the sector by increasing construction and housing projects in 2025. On the other hand, falling mortgage rates will attract more homebuyers, creating demand for building materials and equipment. Ken Fisher said, 'Investors are ignoring some of these positive developments,' pointing to an overlooked chance in housing-related businesses.
Aerospace is also making a comeback through airlines' need to replace aging planes, driving demand for maintenance and parts, which demonstrates significant progress in aerospace-based companies. Meanwhile, only 25% of the $1.9 trillion in planned North American infrastructure projects have started construction, suggesting big growth ahead for equipment providers and construction companies.
In 2025, industrial stocks look promising due to clean technology and automation advancements. As reported in Deloitte's 2025 Manufacturing Industry Outlook, over $31 billion went into clean-tech manufacturing facilities in 2024, showing a move toward sustainability. With decreasing interest rates and high demand for environmentally friendly tech, these investments are highly probable to drive growth in the industry. Ken Fisher noted made the following comment about the current situation:
'The fear is bigger than the problem can be. Single-period stock market comparisons are always iffy, but it may well be this goes something like the 1998 stock market correction leading to a 26% annual return.'
His view suggests a more positive review of the industrial sector, predicting it will grow despite tariff concerns. With investments in automation, clean tech, and domestic production, these stocks have strong long-term potential even with short-term challenges.
To compile this list, we reviewed Ken Fisher's SEC Q4 2024 13F filings. We picked 10 stocks with the highest upside potential from their current levels as of time of writing this article. Finally, we ranked the stocks in ascending order based on their highest analyst upside potential while also outlining hedge fund sentiment regarding these stocks, as per Insider Monkey's database of Q4 2024.
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).
Engineers analyzing a complex network of process control software and systems.
Number of Hedge Fund Holders: 41
Upside Potential: 22.01%
Emerson Electric Co. (NYSE:EMR) develops automation technology and software for industries such as process control, discrete manufacturing, instrumentation, and asset management. Working through seven specialized divisions, the company tackles global needs for energy efficiency and digital transformation.
For Q1 2025 ended December 31, 2024, Emerson beat earnings forecasts with $1.38 per share, above the $1.28 analysts expected. Emerson Electric Co. (NYSE:EMR) achieved record gross margins of 53.5% and adjusted segment EBITDA margins of 28%, up 340 basis points from last year. The company's free cash flow nearly doubled to $694 million thanks to cost-cutting and better margins. Although its discrete business fell 4%, while process and hybrid segments grew 5%, and software and control rose 4%. Emerson Electric also bought back $1 billion in shares during the quarter.
Moreover, Emerson saw strong results in the US and the Middle East, but China remained weak, especially in manufacturing and chemicals. Emerson Electric Co. (NYSE:EMR) built up an $11.5 billion project pipeline and continues its focus on LNG, power, and semiconductor markets as key growth areas. It expects over $1 billion in future LNG orders and added $300 million in semiconductor opportunities. The company's growth plans include acquiring AspenTech and opening a new headquarters in St. Louis.
Despite some regional challenges, Emerson Electric Co. (NYSE:EMR) remains a solid industrial tech investment due to strong cash flow and growing digital offerings. Ken Fisher owns about $252.3 million in Emerson shares, making up 0.1% of his fund's holdings.
The company aims for high-70% operating leverage (up from mid-40% last year) and plans to return $3.2 billion to shareholders through dividends and buybacks.
Overall, EMR ranks 7th on our list of billionaire Ken Fisher's industrial stock picks with huge upside potential. While we acknowledge the potential of EMR, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher 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 EMR 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.
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