Industrial stocks are becoming a focal point for investors as several global trends converge to drive corporate profits upward. Among those capitalizing on this shift is Josh Wein, a portfolio manager at the Hennessy Cornerstone Growth Fund whose strategy has outperformed nearly all of its peers over the last fifteen years. Rather than chasing hype, Wein utilizes a strict top down screening process to identify undervalued companies with strong momentum, avoiding the typical pitfalls of thematic investing while still landing on sectors poised for massive growth.
According to Wein, the surge in industrial interest is being fueled by a combination of increased defense spending, the return of domestic manufacturing through reshoring, and specifically the massive physical infrastructure required to support artificial intelligence. While many traders view AI solely as a software play, Wein sees a long runway for construction and engineering firms tasked with building the data centers and power grids necessary to keep these systems running. These types of projects often involve huge backlogs and steady timelines, providing a level of stability that appeals to disciplined fund managers.
To find his winning picks, Wein applies rigorous filters focusing on market capitalization and price to sales ratios to ensure he is buying assets at a discount compared to the broader S&P 500. He looks for companies showing genuine improvement in net income combined with positive twelve month price momentum, which serves as proof that the market recognizes the fundamental recovery. This method helps him separate legitimate turnarounds from value traps where stocks remain cheap because their business models are broken.
Among his current high conviction bets in the industrial space are Centuri Holdings and Primoris, both of which are heavily involved in energy infrastructure and distribution systems essential for powering new technology hubs. He also highlights MYR Group for its expertise in electrical grid wiring for data centers and Tutor Perini for its broad construction capabilities through subsidiaries like Fisk Electric. Together, these selections represent a strategic bet on the tangible hardware and concrete foundations that must exist before any AI revolution can truly take hold.
