SGA Adds Linde on Global Industrial Recovery Thesis

Sustainable Growth Advisers added Linde plc to its Global Growth Strategy in the second quarter, betting the industrial gas company will benefit from a recovery in manufacturing and semiconductor production across its main markets.

SGA, in its quarterly investor letter, said the stock was added in April after being exited in 2024 over valuation concerns. The firm cited Linde's long-term recurring contracts in essential end markets – healthcare, manufacturing, electronics, chemicals and energy – as providing pricing power and cash flow visibility even in a slower growth environment.

Linde's revenue is concentrated in the U.S., which accounts for roughly 45% of the total. Europe contributes about 25%, while Asia-Pacific makes up more than 20%. SGA expects the U.S. to benefit from an industrial recovery, increased semiconductor manufacturing and higher refinery utilization. Europe, which has been a drag from negative volume growth, should stabilize over the medium term. Asia-Pacific, the firm said, will reaccelerate with higher semiconductor production acting as a key demand driver.

The stock closed at $487.57 on Aug. 21, down 3.84% over the past month but up 2.03% over 52 weeks. Linde has a market capitalization of $224.76 billion.

Hedge fund interest has grown. At the end of the first quarter, 104 funds held Linde positions, up from 89 in the previous quarter, according to Insider Monkey data.

SGA's Global Growth Strategy targets 16% revenue growth and 20% earnings growth over three years for its portfolio. The firm said Linde's fundamentals have continued to progress even as the stock price consolidated. The broader portfolio's median revenue and EPS growth hit 12% and 14%, with more than 60% of holdings beating expectations, SGA said.