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Is Trane Technologies plc (TT) an Attractive Investment?

ClearBridge Investments, an investment management company, released its “ClearBridge Sustainability Leaders Strategy” third 2022 investor letter. A copy of the same can be downloaded here. The strategy outperformed its benchmark in the third quarter, the Russell 3000 Index. Only the industrial sector contributed positively to the strategy’s absolute performance among the ten sectors the strategy invested in. The significant performance detractors were materials, consumer discretionary, and real estate sectors. In addition, please check the fund’s top five holdings to know its best picks in 2022.

ClearBridge Investments highlighted stocks like Trane Technologies plc (NYSE:TT) in the third quarter 2022 investor letter. Headquartered in Swords, Ireland, Trane Technologies plc (NYSE:TT) provides solutions for heating, ventilation, air conditioning, and transport refrigeration. On November 22, 2022, Trane Technologies plc (NYSE:TT) stock closed at $178.76 per share. One-month return of Trane Technologies plc (NYSE:TT) was 16.11%, and its shares lost 8.60% of their value over the last 52 weeks. Trane Technologies plc (NYSE:TT) has a market capitalization of $41.17 billion.

ClearBridge Investments made the following comment about Trane Technologies plc (NYSE:TT) in its Q3 2022 investor letter:

"Industrials holdings such as process and motion control company Regal Rexnord (RRX) and HVAC and transport refrigeration company Trane Technologies plc (NYSE:TT) also performed well, lifted by strong execution as both beat earnings and revenue expectations. Both companies should also benefit from the IRA as they enable greater energy efficiency in a variety of settings: Regal Rexnord innovates through best-in-class engineering capabilities to help customers achieve their energy efficiency objectives; Trane’s products enable lower energy demand and emissions in HVAC systems and buildings, where it estimates ~15%–25% of all GHG emissions are emitted.

According to ClearBridge holding Trane Technologies, under ideal conditions, a heat pump can transfer 300% more energy than it consumes. In contrast, a high efficiency gas furnace is only about 95% efficient. Further, heat pumps are powered by electricity, creating substantial potential fuel savings. Assuming the electricity comes from clean energy sources, heat pumps are also much more “green.”

Heat pumps gained prominence in June when President Biden invoked the Defense Production Act of 1950 to call for more domestic production of heat pumps to reduce American energy bills, fight climate change and free up U.S. natural gas to support allies in Europe. The IRA, which provides $500 million in funding for expanding production of heat pumps as well as processing critical minerals, should be a plus for manufacturers and ClearBridge holdings like Trane and Johnson Controls (JCI)."

Refrigeration, Airconditioning
Refrigeration, Airconditioning

Photo by Sigmund on Unsplash

Trane Technologies plc (NYSE:TT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held Trane Technologies plc (NYSE:TT) at the end of the third quarter, which was 38 in the previous quarter.

We discussed Trane Technologies plc (NYSE:TT) in another article and shared the stock picks of Dmitry Balyasny’s hedge fund. In addition, please check out our hedge fund investor letters Q3 2022 page for more investor letters from hedge funds and other leading investors.

 

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Disclosure: None. This article is originally published at Insider Monkey.