Are Hedge Funds Eyeing Curtiss-Wright Corp. (NYSE:CW), the Underrated Manufacturing Stock?

We recently released a list of the 15 Little-Known Manufacturing Companies That Hedge Funds Are Investing In In this piece, we will examine how Curtiss-Wright Corp. (NYSE:CW) measures up against other small-cap manufacturing companies.

On February 26, Liz Ann Sonders, who serves as the chief investment strategist at Charles Schwab, appeared on CNBC’s 'Squawk on the Street' to address potential setbacks in manufacturing caused by persistent policy uncertainties. According to her, investor focus currently leans toward apprehensions regarding economic expansion rather than inflationary pressures. During this discussion, she highlighted several softening metrics including dips in consumer confidence levels, lower retail sales numbers, and diminished service sector Purchasing Managers' Index (PMI) readings. Additionally, Sonders pointed out that heightened political ambiguity leads businesses to postpone significant investments in equipment and curtail their financial planning efforts. Over the last twelve months, she observed that shifts in bond yields were predominantly influenced either by changes in inflation reports or signs of economic performance, whether these trends showed upward or downward trajectories. Recently though, decreases in yield rates seem to be spurred mainly by fears concerning decelerating economic activity instead of anticipations for decreasing price hikes. Consequently, this shift prompts greater interest among investors towards safeguarded industry segments across the stock market, indicating an overall inclination towards prudence.

The latest Purchasing Managers' Index (PMI) indicates a downturn in service activities, whereas manufacturing seems to be gaining momentum. This shift might lead to a favorable alignment between both industries. However, according to Sonders, the uptick in manufacturing may face challenges because of continuing policy uncertainties. Consequently, numerous firms in the manufacturing industry are becoming more hesitant regarding their future investment plans and expansions. Additionally, Sonders highlighted that although talks were centered around substantial deficit reduction goals initially set at $2 trillion, the realized savings fall far short, totaling under $10 billion currently. In her view, concentrating solely on these reduced expenditures would be too hasty when considering broader economic pressures like those from tariff implementations, adjustments in immigration and deportation laws, and modifications in regulations—all contributing to lowered growth forecasts alongside increased inflation predictions. Furthermore, she noted that proposed alterations in tax policies will probably impact long-term projections rather than immediate trends.

Our Methodology

Initially, we examined financial news articles along with details from the iShares U.S. Manufacturing ETF and Vanguard Industrials ETF, alongside data extracted from Insider Monkey’s Q4 2024 report on hedge fund holdings, to create a roster of smaller-sized manufacturing companies attracting investment interest from major players like hedge funds. Here, "smaller-sized" refers specifically to firms whose stock value ranges from $10 billion to $20 billion as recorded up until April 25th. From these findings, we picked out the leading fifteen names and organized them based on how many different hedge funds had shown confidence in each one by purchasing shares; should multiple entities be backed equally, their relative size—measured via total market capitalization—determined final placement.

Why do we pay attention to the stocks that hedge funds amass? It's straightforward: our analysis indicates that mimicking the leading stock choices from premier hedge funds allows us to surpass the market performance. Each quarter, our monthly bulletin features 14 small-cap and large-cap equities selected through this approach, which has yielded a return of 373.4% starting from May 2014, thereby exceeding its benchmark by 218 percentage points. s ee more details here ).

A production line of industrial machines highlighting the firm's advanced technology.

Curtiss-Wright Corp. (NYSE: CW )

As of April 25, the Market Capitalization stands at $12.75 billion.

Number of Hedge Fund Owners: 50

Curtiss-Wright Corporation (NYSE:CW) specializes in producing engineered products, solutions, and services primarily for sectors such as aerospace and defense, commercial power, processes, and industries. The company functions through three main divisions: Aerospace & Industrial, Defense Electronics, and Naval & Power.

In the fourth quarter of 2024, sales within Curtiss-Wright’s Naval & Power division saw an increase of 12% compared to the same period last year. This growth was driven by greater earnings across major naval defense projects. Notably, this surge encompassed unexpectedly robust output related to both the Columbia-class and Virginia-class submarines, along with advancements in the CVN-81 aircraft carrier initiative. Additionally, the segment reported elevated income stemming from the developmental phase of the upcoming SSN(X) submarine project and heightened requests for their aircraft handling solutions sourced internationally.

Curtiss-Wright projects an anticipated sales increase of 10% to 11% in the Naval & Power division for the year 2025. This expansion is driven by robust development across both their Defense and Commercial sectors. Within naval defense specifically, they forecast growth ranging from 3% to 5%. This rise can be attributed primarily to elevated revenues linked with aircraft carrier operations—most notably through enhanced output on CVN-81—and ongoing assistance provided under the CVN-75 refueling and extensive refurbishment initiative.

Overall, CW ranks 2nd On our roster of small-cap manufacturing equities favored by hedge funds, we recognize the expansion prospects of CW. However, our confidence leans toward AI stocks as they present substantial opportunities for generating significant profits over a brief duration. One particular AI equity has surged since the start of 2025, contrasting with many prominent AI shares which have dipped roughly 25% during this period. Should you seek an AI stock offering greater potential than CW yet trading below five times its earnings, explore our detailed analysis provided in our latest report. cheapest AI stock .

READ NEXT: 20 Top AI Stocks You Should Consider Buying Today and 30 Top Stocks to Purchase Currently as Recommended by Billionaires .

Disclosure: None. This piece was initially published at Insider Monkey .