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US Industrial Production Rebounds: 4 Gainers

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U.S. manufacturing output surpassed estimates in August. The gain can be attributed to an increase in production of machinery and primary metals. Investors can take a look at a couple of stocks that are well positioned to gain from this rebound.

Industrial Production Up, Thanks to Mining Activities

According to a report by Federal Reserve, industrial production jumped 0.6% in August. Per a Reuters’ poll, the figure was well above economists’ expectations of 0.2%. The recovery was driven by a rebound of 1.4% in mining and rise in manufacturing output. This jump is the largest increase in industrial production since August 2018 and includes a 0.1% slump in July.

The industrial production data is unexpectedly good as the manufacturing sector witnessed contraction in both the first and second quarter of 2019, thanks to U.S.-China trade dispute and global economic slowdown.

In fact, per a report by the Institute of Supply Management (ISM), economic activity in the sector contracted last month as well. ISM’s PMI index, which measures everything from new orders, production and inventories to exports and imports, stood at 49.1% last month.

However, industrial production’s surprising rebound is indicative of increased factory activity. Rebound in business equipment (1%), construction (0.9%) and material production (0.9%) also propelled the sector. On an annualized basis, industrial production rose 0.4%. Needless to say, the manufacturing sector holds promise and therefore investing in it could be prudent at present.

Our Choices

We have chosen four stocks from the industrial products sector which investors can consider adding to their portfolio. All of these stocks carry a Zacks Rank #1 (Strong Buy) or 2 (Buy).

Albany International Corp. (AIN - Free Report) is a machine industry company. The company’s businesses primarily comprise of textile and materials processing.

Albany International carries a Zacks Rank #1. In fact, the company’s stock price has already outperformed the Zacks Industrial Products Market on a year-to-date basis (+39.9% vs +32.7%). The Zacks Consensus Estimate for its current-year earnings has risen 1.5% over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Zebra Technologies Corporation (ZBRA - Free Report) is a designer and manufacturer of automatic identification and data capture products.

Zebra Technologies sports a Zacks Rank #1. In fact, the company’s stock price has already outperformed the Zacks Industrial Products Market on a year-to-date basis (+31.3% vs +24.0%). The Zacks Consensus Estimate for its current-year earnings has risen 2% over the past 60 days.

Sealed Air Corporation (SEE - Free Report) is a packaging company offering innovative food and product packaging solutions.

Sealed Air carries a Zacks Rank #2. In fact, the company’s stock price has already outperformed the Zacks Industrial Products Market on a year-to-date basis (+19.3% vs -22.3%). The Zacks Consensus Estimate for its current-year earnings has risen 1.8% over the past 60 days.

Plug Power Inc. (PLUG - Free Report) is an electrical equipment manufacturing company. The company designs and manufactures hydrogen fuel cell systems.

Plug Power carries a Zacks Rank #2. In fact, the company’s stock price has already outperformed the Zacks Industrial Products Market on a year-to-date basis (+127.5% vs +11.7%). The Zacks Consensus Estimate for its current-year earnings has risen 5.3% over the past 60 days.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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