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5 Conglomerate Stocks That Survived the Sector Crash in 2018
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The downsides sweeping through the equity universe this year has left the conglomerate sector in bad shape. Profitability of several multi-sector companies is at stake on account of several headwinds, including a full-blown trade war between the United States and China and the ongoing truck industry issues. However, through our latest Style Score System, we have handpicked five conglomerate stocks for your portfolio. These picks have sailed through the sector’s crash in 2018 and are likely to continue their winning trend in the New Year as well.
Factor’s Derailing the Sector’s Growth
Of late, Wall Street’s bigger names are troubled by severe supply-side challenges.
Tariffs levied over several U.S. imports (like aluminum and steel) this year, gave rise to material cost inflation, thereby pushing down margins of many conglomerates. Attempts taken to defy inflation with selling price adjustments have made exports expensive and depressed the international revenues of some businesses.
We notice that a tightened workforce market scenario in the United States has significantly augmented the labor cost of these multi-sector behemoths. Additionally, shortage of truck drivers and soaring truck fuel surcharges in 2018 escalated the freight and transportation expenses.
Moving ahead, a stronger U.S. dollar might hurt overseas revenues and profitability of these stocks. Also, the Fed’s aggressive stance to hike interest rates might raise the cost of borrowing for the sector.
Our Take
We believe that investors should not completely shy away from the multi-sector stocks in favor of retaining core business-focused companies.
Despite some setbacks, these companies remain buoyed by the corporate tax cuts implemented in December 2017 and eye favorable domestic business prospects; thanks to the fiscal stimulus provided by the Republic-led administration. Additionally, we notice that some of these mega companies are currently undertaking bold restructuring moves, divesting non-core businesses and making meaningful acquisitions to sail through jittery market conditions. In sync with these encouraging signals, we have zeroed in on five conglomerate stocks that are likely to outperform and add sparkle to your portfolio.
These picks currently carry a favorable Zacks Rank #1 (Strong Buy) or 2 and flaunt a VGM Score of A or B. Also, these stocks have witnessed positive earnings estimate revisions for the past 60 days.
HC2 Holdings, Inc. provides telecommunications, marine, insurance, construction, life sciences, other business services in the market.
The Zacks Consensus Estimate for earnings has remarkably moved up to $3.61 per share from the loss of 20 cents per share for 2018. Notably, the projected year-over-year earnings growth rate for the company is currently pegged at 464.65% for the current year. The company sports a Zacks Rank #1 and has a VGM Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
Barloworld Limited (BRRAY - Free Report) distributes products that offer fleet management, rental and logistics solutions to the market.
The company currently carries a Zacks Rank #2 and has VGM Score of A. The Zacks Consensus Estimate for earnings has moved up 3.5% to 88 cents per share for fiscal year 2019 (ending September 2019). Notably, the projected year-over-year earnings growth rate for the company is currently pegged at 22.2% for fiscal year 2019.
Crane Co. (CR - Free Report) produces and sells state-of-the-art engineered industrial products across the globe.
The company carries a Zacks Rank #2 and has a VGM Score of A. The Zacks Consensus Estimate for earnings has moved up 2.3% to $5.89 per share for 2018. Notably, the projected year-over-year earnings growth rate for the company is currently pegged at 30% for 2018.
Federal Signal Corporation (FSS - Free Report) manufactures, designs and supplies integrated solutions and products for governmental, commercial and industrial customers.
The company has a Zacks Rank #2 and VGM Score of A. The Zacks Consensus Estimate for earnings has moved up 3% to $1.36 per share for 2018. Notably, the projected year-over-year earnings growth rate for the company is currently pegged at 60% for 2018.
ITT Inc. (ITT - Free Report) produces and sells customized technology solutions and engineered critical components in the market.
The company carries a Zacks Rank #2 and has a VGM Score of B. The Zacks Consensus Estimate for earnings has moved up 0.3% to $3.15 per share for 2018. Notably, the projected year-over-year earnings growth rate for the company is currently pegged at 21.6% for 2019.
In addition to the stocks discussed above, would you like to know about our 10 top tickers to buy and hold for the entirety of 2019?
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5 Conglomerate Stocks That Survived the Sector Crash in 2018
The downsides sweeping through the equity universe this year has left the conglomerate sector in bad shape. Profitability of several multi-sector companies is at stake on account of several headwinds, including a full-blown trade war between the United States and China and the ongoing truck industry issues. However, through our latest Style Score System, we have handpicked five conglomerate stocks for your portfolio. These picks have sailed through the sector’s crash in 2018 and are likely to continue their winning trend in the New Year as well.
Factor’s Derailing the Sector’s Growth
Of late, Wall Street’s bigger names are troubled by severe supply-side challenges.
Tariffs levied over several U.S. imports (like aluminum and steel) this year, gave rise to material cost inflation, thereby pushing down margins of many conglomerates. Attempts taken to defy inflation with selling price adjustments have made exports expensive and depressed the international revenues of some businesses.
We notice that a tightened workforce market scenario in the United States has significantly augmented the labor cost of these multi-sector behemoths. Additionally, shortage of truck drivers and soaring truck fuel surcharges in 2018 escalated the freight and transportation expenses.
Moving ahead, a stronger U.S. dollar might hurt overseas revenues and profitability of these stocks. Also, the Fed’s aggressive stance to hike interest rates might raise the cost of borrowing for the sector.
Our Take
We believe that investors should not completely shy away from the multi-sector stocks in favor of retaining core business-focused companies.
Despite some setbacks, these companies remain buoyed by the corporate tax cuts implemented in December 2017 and eye favorable domestic business prospects; thanks to the fiscal stimulus provided by the Republic-led administration. Additionally, we notice that some of these mega companies are currently undertaking bold restructuring moves, divesting non-core businesses and making meaningful acquisitions to sail through jittery market conditions. In sync with these encouraging signals, we have zeroed in on five conglomerate stocks that are likely to outperform and add sparkle to your portfolio.
These picks currently carry a favorable Zacks Rank #1 (Strong Buy) or 2 and flaunt a VGM Score of A or B. Also, these stocks have witnessed positive earnings estimate revisions for the past 60 days.
HC2 Holdings, Inc. provides telecommunications, marine, insurance, construction, life sciences, other business services in the market.
The Zacks Consensus Estimate for earnings has remarkably moved up to $3.61 per share from the loss of 20 cents per share for 2018. Notably, the projected year-over-year earnings growth rate for the company is currently pegged at 464.65% for the current year. The company sports a Zacks Rank #1 and has a VGM Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
Barloworld Limited (BRRAY - Free Report) distributes products that offer fleet management, rental and logistics solutions to the market.
The company currently carries a Zacks Rank #2 and has VGM Score of A. The Zacks Consensus Estimate for earnings has moved up 3.5% to 88 cents per share for fiscal year 2019 (ending September 2019). Notably, the projected year-over-year earnings growth rate for the company is currently pegged at 22.2% for fiscal year 2019.
Crane Co. (CR - Free Report) produces and sells state-of-the-art engineered industrial products across the globe.
The company carries a Zacks Rank #2 and has a VGM Score of A. The Zacks Consensus Estimate for earnings has moved up 2.3% to $5.89 per share for 2018. Notably, the projected year-over-year earnings growth rate for the company is currently pegged at 30% for 2018.
Federal Signal Corporation (FSS - Free Report) manufactures, designs and supplies integrated solutions and products for governmental, commercial and industrial customers.
The company has a Zacks Rank #2 and VGM Score of A. The Zacks Consensus Estimate for earnings has moved up 3% to $1.36 per share for 2018. Notably, the projected year-over-year earnings growth rate for the company is currently pegged at 60% for 2018.
ITT Inc. (ITT - Free Report) produces and sells customized technology solutions and engineered critical components in the market.
The company carries a Zacks Rank #2 and has a VGM Score of B. The Zacks Consensus Estimate for earnings has moved up 0.3% to $3.15 per share for 2018. Notably, the projected year-over-year earnings growth rate for the company is currently pegged at 21.6% for 2019.
In addition to the stocks discussed above, would you like to know about our 10 top tickers to buy and hold for the entirety of 2019?
These 10 are painstakingly handpicked from over 4,000 companies covered by the Zacks Rank. They are our primary picks poised to outperform in the year ahead.Be among the first to see the new Zacks Top 10 Stocks >>