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U.S. Durable Goods Orders Jump in May: 4 Stocks to Buy
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New orders for long-lasting durable goods bounced back in May after a decline in April. The jump was driven by the recent pickup in consumer demand. Also, government aid and hopes of a faster-than-expected economic recovery helped drive demand for durable goods.
This once again proves that the nation is on track for a steady economic recovery. Also, shipment of core capital goods, which is used to measure investment in gross domestic product, alsoshowed an impressive jump in May.
Durable Goods Orders Rebound
The Commerce Department said on Jun 24 that new orders for durable goods rose 2.3% in May on a month-over-month basis and after declining in April. This is also the fastest pace of increase since January.
Orders excluding transportation equipment increased 0.3% in May. Orders for U.S.-made capital goods increased for the 12th time in the last 13 months, thus indicating the strength in the economy. Orders for aircraft surged 27.4% in May after soaring 31.5% in April. Excluding transportation goods, durable goods orders increased 0.3%.
Economic Growth on Track
Surprising orders for core durable goods (which excludes defense aircraft) declined 0.1% in May after an upwardly revised 2.7% gain in April. This was mainly because of a backlogin the supply chain and a shortage of workers.
New orders of automobile and parts increased 2.1%. Also, shipments of capital goods rose 0.9%, increasing for the third straight month. Understandably, people are more confident about the economy now and despite hindrances in the supply chain for factories, orders have been on the rise.
The Fed said earlier this month that factory production grew 0.9% on a rise in output of cars, trucks and auto parts. Also, in a separate report on Jun 24, the government said that the economy grew at an annualized pace of 6.4% in the first quarter. Understandably, people are more confident about the economy now and despite hindrances in the supply chain for factories, orders have been on the rise.
Our Choices
Given this scenario, it will be prudent to invest in stocks with a favorable Zacks Rank that are poised to gain from the solid durable goods orders. We narrowed down our search to five such stocks. Each of these stocks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Industrial Technologies, Inc. (AIT - Free Report) is a distributor of value-added industrial products — including engineered fluid power components, bearings, specialty flow control solutions, power transmission products and miscellaneous industrial supplies.
The company’s expected earnings growth rate for the current year is 16.1%. The Zacks Consensus Estimate for current-year earnings has improved 12.8% over the past 60 days. The company has a Zacks Rank #1.
EMCORE Corporation (EMKR - Free Report) offers a broad portfolio of compound semiconductor-based products for the broadband, fiber optic, satellite and terrestrial solar power markets.
The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 28.6% over the past 60 days. The company carries a Zacks Rank #1.
Entegris, Inc. (ENTG - Free Report) is a leading provider of materials management solutions to the microelectronics industry including, in particular, the semiconductor manufacturing and disk manufacturing markets.
The company’s expected earnings growth rate for the current year is 25.6%. The Zacks Consensus Estimate for current-year earnings has improved 7% over the past 60 days. The company carries a Zacks Rank #2.
Deere & Company (DE - Free Report) is the world’s largest producer of agricultural equipment, manufacturing agricultural machinery since 1837 under the iconic John Deere brand with its signature green and yellow color scheme.
The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 11.7% over the past 60 days. The company has a Zacks Rank #2.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Image: Bigstock
U.S. Durable Goods Orders Jump in May: 4 Stocks to Buy
New orders for long-lasting durable goods bounced back in May after a decline in April. The jump was driven by the recent pickup in consumer demand. Also, government aid and hopes of a faster-than-expected economic recovery helped drive demand for durable goods.
This once again proves that the nation is on track for a steady economic recovery. Also, shipment of core capital goods, which is used to measure investment in gross domestic product, alsoshowed an impressive jump in May.
Durable Goods Orders Rebound
The Commerce Department said on Jun 24 that new orders for durable goods rose 2.3% in May on a month-over-month basis and after declining in April. This is also the fastest pace of increase since January.
Orders excluding transportation equipment increased 0.3% in May. Orders for U.S.-made capital goods increased for the 12th time in the last 13 months, thus indicating the strength in the economy. Orders for aircraft surged 27.4% in May after soaring 31.5% in April. Excluding transportation goods, durable goods orders increased 0.3%.
Economic Growth on Track
Surprising orders for core durable goods (which excludes defense aircraft) declined 0.1% in May after an upwardly revised 2.7% gain in April. This was mainly because of a backlogin the supply chain and a shortage of workers.
New orders of automobile and parts increased 2.1%. Also, shipments of capital goods rose 0.9%, increasing for the third straight month. Understandably, people are more confident about the economy now and despite hindrances in the supply chain for factories, orders have been on the rise.
The Fed said earlier this month that factory production grew 0.9% on a rise in output of cars, trucks and auto parts. Also, in a separate report on Jun 24, the government said that the economy grew at an annualized pace of 6.4% in the first quarter. Understandably, people are more confident about the economy now and despite hindrances in the supply chain for factories, orders have been on the rise.
Our Choices
Given this scenario, it will be prudent to invest in stocks with a favorable Zacks Rank that are poised to gain from the solid durable goods orders. We narrowed down our search to five such stocks. Each of these stocks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Industrial Technologies, Inc. (AIT - Free Report) is a distributor of value-added industrial products — including engineered fluid power components, bearings, specialty flow control solutions, power transmission products and miscellaneous industrial supplies.
The company’s expected earnings growth rate for the current year is 16.1%. The Zacks Consensus Estimate for current-year earnings has improved 12.8% over the past 60 days. The company has a Zacks Rank #1.
EMCORE Corporation (EMKR - Free Report) offers a broad portfolio of compound semiconductor-based products for the broadband, fiber optic, satellite and terrestrial solar power markets.
The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 28.6% over the past 60 days. The company carries a Zacks Rank #1.
Entegris, Inc. (ENTG - Free Report) is a leading provider of materials management solutions to the microelectronics industry including, in particular, the semiconductor manufacturing and disk manufacturing markets.
The company’s expected earnings growth rate for the current year is 25.6%. The Zacks Consensus Estimate for current-year earnings has improved 7% over the past 60 days. The company carries a Zacks Rank #2.
Deere & Company (DE - Free Report) is the world’s largest producer of agricultural equipment, manufacturing agricultural machinery since 1837 under the iconic John Deere brand with its signature green and yellow color scheme.
The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 11.7% over the past 60 days. The company has a Zacks Rank #2.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How to Profit from Trillions on Spending for Infrastructure >>