What Makes EMCOR Group (EME) a Good Investment?

Soumya Eswaran

Mon, May 19, 2025, 7:07 AM 3 min read

TimesSquare Capital Management, an equity investment management company, released its “U.S. Focus Growth Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The broad-based downturn in US equities underperformed overseas markets in the first quarter. In this negative environment, the strategy outperformed the index in the first quarter. The strategy returned 2.42% (gross) and 2.20% (net) compared to a -7.12% return for the Russell Midcap Growth Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, TimesSquare Capital U.S. Focus Growth Strategy highlighted stocks such as EMCOR Group, Inc. (NYSE:EME). Headquartered in Norwalk, Connecticut, EMCOR Group, Inc. (NYSE:EME) offers construction and facilities, building, and industrial services.  The one-month return of EMCOR Group, Inc. (NYSE:EME) was 29.70%, and its shares gained 22.56% of their value over the last 52 weeks. On May 16, 2025, EMCOR Group, Inc. (NYSE:EME) stock closed at $470.43 per share with a market capitalization of $21.06 billion.

TimesSquare Capital U.S. Focus Growth Strategy stated the following regarding EMCOR Group, Inc. (NYSE:EME) in its Q1 2025 investor letter:

"At the start of the year, we initiated a position in EMCOR Group, Inc. (NYSE:EME), which provides construction and operational services for mechanical and electrical systems to a broad range of commercial, industrial, utility, and institutional customers. Its underlying business trends remained strong, though there were some market concerns that EMCOR’s activities tied to data center construction would slow. As EMCOR’s price retreated, we continued building the position given the strong demand the company saw."

A construction worker using a mechanical tool for maintenance on a large industrial machine.

EMCOR Group, Inc. (NYSE:EME) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 55 hedge fund portfolios held EMCOR Group, Inc. (NYSE:EME) at the end of the fourth quarter, compared to 40 in the third quarter. In the first quarter of 2025, EMCOR Group, Inc. (NYSE:EME) reported revenue of $3.87 billion, reflecting year-over-year growth of 12.7%. While we acknowledge the potential of EMCOR Group, Inc. (NYSE:EME) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.