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In this piece, we will take a look at the ten best home appliance stocks to buy. If you want to skip our industry background and jump ahead to the top five stocks in this list, then take a look at 5 Best Home Appliances Stocks to Buy.
Out of the countless industries that anyone can pick out from when choosing a sector to invest in, the home appliance sector is one that is not subject to drastic shifts in demand. Of course, while consumer spending powers and some seasonality due to the weather plays a role in determining demand, overall, the sector continues to perform simply because technology enables companies to churn out new gadgets that make living much easier and at lower costs.
Therefore, it is no surprise that home appliance companies are among some of the biggest in the world, with the sector having given us some modern day behemoths such as Samsung and Panasonic. The industry itself was worth $308 billion last year, and it will grow at a compounded annual growth rate of 7% from 2021 to 2025 to sit at $436 billion according to a report from The Business Research Company. Driving this growth will be a host of factors such as the growing market for outdoor parties, LED lights to minimize power consumption, and newer designs, believes the research firm.
Just as is the case with nearly every other industry, the home appliance segment is also benefiting from the boom in technology. This has resulted in the growth of new gadgets that are dubbed as 'smart' home appliances, and a report from KBV research zeroes in on this segment to estimate that it alone will grow at a much stronger CAGR of 8.7% until 2028. This growth will place its value at $50 billion by the end of the forecast period. Smart home appliances offer their users a variety of features, such as controlling their features remotely over the Internet through smartphones, use self learning capabilities to adjust themselves to the user's schedule, and providing better energy management as well - with the latter being a crucial point considering the recent energy shortages that are plaguing global economies in the wake of the ongoing Russian invasion of Ukraine.
In this piece, we sifted out the top home appliance stocks in the market right now, with the notable picks being Spectrum Brands Holdings, Inc. (NYSE:SPB), Amazon.com, Inc. (NASDAQ:AMZN), and Whirlpool Corporation (NYSE:WHR).
Our Methodology
We studied the home appliance industry in detail to select the top companies that are operating in it. These were then analyzed through several different factors such as industry dynamics, financial performance, and hedge fund sentiment gathered through Insider Monkey's Q2 2022 survey of 895 funds.
10 Best Home Appliances Stocks to Buy
10. Hamilton Beach Brands Holding Company (NYSE:HBB)
Number of Hedge Fund Holders: 5
Hamilton Beach Brands Holding Company (NYSE:HBB) is an American company that designs and sells small household and specialty appliances all over the globe. Its products include food processors, electric grills, coffee makers, and toaster ovens. The firm is headquartered in Glen Allen, Virginia.
Hamilton Beach Brands Holding Company (NYSE:HBB) grew its international sales during its first quarter, as higher volumes and a stronger U.S. dollar bolstered the company's income statement. However, even though its overall revenue fell by a small 1.9%, its bottom line statement blew estimates out of the park as the firm reported $7.2 million in net income which was more than double the $2.9 million that it had reported in the year ago quarter.
Hamilton Beach Brands Holding Company (NYSE:HBB) is also the cheapest company in its peer list as it has price to earnings, price to operating cash flow, and enterprise value to operating income ratios of 8.3, 5.4, and 7.9, respectively. The firm pays a 10 cent dividend for a 3.73% yield and five out of the 895 hedge funds polled by Insider Monkey during Q2 2022 had held its shares.
Out of these, Martin Whitman's Third Avenue Management is Hamilton Beach Brands Holding Company (NYSE:HBB)'s largest investor. It owns 602,214 shares that are worth $7.4 million.
Along with Spectrum Brands Holdings, Inc. (NYSE:SPB), Amazon.com, Inc. (NASDAQ:AMZN), and Whirlpool Corporation (NYSE:WHR), Hamilton Beach Brands Holding Company (NYSE:HBB) is a hot home appliance stock.
9. PC Connection, Inc. (NASDAQ:CNXN)
Number of Hedge Fund Holders: 8
PC Connection, Inc. (NASDAQ:CNXN) is a consumer technology firm that sells home appliances such as camcorders, home audio systems, peripherals, cameras, and digital media players. The company is headquartered in Merrimack, New Hampshire.
PC Connection, Inc. (NASDAQ:CNXN) grew its revenue by 17.7% during its second fiscal quarter, with a strong performance in all its business segments including the public segment, which grew revenues by 16.5%. In the quarter, the firm's retail and manufacturing units also grew by 10% and 16%, respectively. These led to a strong 46% operating income growth as well, alongside a 47% growth in earnings per share.
Additionally, PC Connection, Inc. (NASDAQ:CNXN)'s shares have withstood the stock market drops this year, with the share price up by 20% year to date. By the end of this year's second quarter, eight out of the 895 hedge funds polled by Insider Monkey had invested in the company.
PC Connection, Inc. (NASDAQ:CNXN)'s largest investor is Chuck Royce's Royce & Associates which owns 143,809 shares that are worth $6.3 million.
8. National Presto Industries, Inc. (NYSE:NPK)
Number of Hedge Fund Holders: 9
National Presto Industries, Inc. (NYSE:NPK) is an American company that sells small electric home appliances. These include pressure cookers, heat controlled skillets, air fryers, waffle makers, electric heaters, and pizza ovens. It is based in Eau Claire, Wisconsin.
National Presto Industries, Inc. (NYSE:NPK) has a fortress balance sheet, as the firm has no debt and $67 million in cash as of July 2022 - the latest period for which its financials are available. This leaves the firm with a lot of buffers should it face the brunt of a potential recession, and is adequate to cover its operating expenses for almost a year. The firm's latest quarterly earnings revealed that its operating expenses had stood at $7 million during the quarter.
National Presto Industries, Inc. (NYSE:NPK) pays a $1.12 dividend for a 6.74% yield. As part of their second quarter of 2022 holdings, nine out of the 895 hedge funds polled by Insider Monkey owned a stake in the home appliances firm.
National Presto Industries, Inc. (NYSE:NPK)'s largest investor is Jim Simons' Renaissance Technologies which owns 212,500 shares that are worth $13.9 million.
7. iRobot Corporation (NASDAQ:IRBT)
Number of Hedge Fund Holders: 12
iRobot Corporation (NASDAQ:IRBT) is a smart home appliance company that sells a host of different robots, such as vacuum cleaning robots and floor mapping robots. Additionally, it also provides handheld vacuum cleaners and a platform that allows its robots to be programmed. The firm is headquartered in Bedford, Massachusetts.
iRobot Corporation (NASDAQ:IRBT) is currently in the process of being acquired by the retail giant Amazon, for a $61 per share price tag. The firm's shares are trading at $56 per share and the deal offers a nice premium. Should the merger gain the Federal Trade Commission's (FTC) approval, then iRobot Corporation (NASDAQ:IRBT) will see several benefits, such as eliminating the costs of placing its products on Amazon, and bolstering its research and developing spend.
Insider Monkey's Q2 2022 survey of 895 hedge funds revealed that 12 out of the 895 hedge funds that were polled had bought iRobot Corporation (NASDAQ:IRBT)'s shares.
D.E. Shaw's D E Shaw is iRobot Corporation (NASDAQ:IRBT)'s largest investor. It owns a $7.1 million stake that comes via 195,256 shares.
6. Thermon Group Holdings, Inc. (NYSE:THR)
Number of Hedge Fund Holders: 13
Thermon Group Holdings, Inc. (NYSE:THR) designs and sells heating home appliances such as heat tracing systems, thermostats, boilers, air heaters, gas fired blowers, and mounting brackets. The company is based in Austin, Texas.
Thermon Group Holdings, Inc. (NYSE:THR) first fiscal quarter of 2023 saw the firm grow its revenue by 34% to $95 million. The firm's free cash flow also stood at a strong $10 million during Q1, and this also marked the second time that the free cash flow was 150% of its net income. The growth came despite the stronger U.S. dollar wiping $2.9 million off of the firm's income statements.
Thermon Group Holdings, Inc. (NYSE:THR) also has a net debt to operating income ratio of 1.7x, indicating that the firm is capable of generating sufficient cash to cover its liabilities. The firm's shares have fallen by a small 4% on the stock market this year, and 13 out of the 895 hedge funds surveyed by Insider Monkey during Q2 2022 had invested in it.
Out of these, Jeffrey Moskowitz's Harvey Partners is Thermon Group Holdings, Inc. (NYSE:THR)'s largest investor. It owns a $19.8 million stake that comes through the fund owning 1.4 million shares.
Along with other top names such as Spectrum Brands Holdings, Inc. (NYSE:SPB), Whirlpool Corporation (NYSE:WHR), and Amazon.com, Inc. (NASDAQ:AMZN), Thermon Group Holdings, Inc. (NYSE:THR) is also a strong home appliance stock.
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Disclosure: None. 10 Best Home Appliances Stocks to Buy is originally published on Insider Monkey.
