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5 Stocks Set to Gain on Continued Rise in Factory Orders

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Factory orders rose again in December 2020, indicating that the manufacturing sector in the United States remains robust, recovering steadily from the slump witnessed toward the earlier part of last year due to the pandemic. Notably, the Commerce Department reported that factory orders rose for the eighth consecutive month in December, rising 1.1%, following an increase of 1.3% in November, as quoted in a MarketWatch article.

Moreover, the article stated that the previously released estimates of durable goods orders were revised upward, rising 0.5% in December, from the initial estimate of 0.2% gain. Meanwhile, orders for nondurable goods signaled an uptick, rising 1.7% during the month.

Notably, the article also mentioned that nondefense capital goods orders, excluding aircraft, which is seen as a measure for studying spending plans on equipment, also rose 0.7% in December, following an upward revision from the previously estimated 0.6% increase. Meanwhile, a Reuters article mentioned that the factory orders were boosted in December due to demand for machinery, electrical equipment, appliances, components, coupled with demand for primary metals and fabricated metal products.

Reflective of the rise in orders, the fourth-quarter U.S. GDP numbers also indicated a continued upturn, even though the growth moderated from the third quarter. Per the “advance” estimate released by the Bureau of Economic Analysis, GDP increased at an annual rate of 4% in the fourth quarter, following an increase of 33.4% in the third quarter. Even though GDP contracted 3.5% in 2020, the economy is expected to return to its growth path in 2021, following the expansion witnessed in the latter half of 2020. Notably, the Congressional Budget Office predicted real GDP to grow 3.7% in 2021, as mentioned in a CNBC article. Moreover, the article mentioned that the GDP growth is expected to average 2.6% over the next five years.

In fact, the economy should receive a further boost from the passing of the Biden administration’s proposed $1.9 trillion fiscal relief bill. Meanwhile, the proposed bill has also led to an uptick in consumer confidence on an improving outlook on the economy. Notably, a Bloomberg article quoted that the Conference Board’s index of statement increased to 89.3 in January following a revised 87.1 reading in December.

5 Top Stocks to Buy Now

Factory orders look set to continue its recovery as the U.S. economy is expected to witness growth in 2021. Moreover, the proposed fiscal relief bill should also provide further aid. This makes it a good time to invest in stocks that stand to benefit from the rising orders and are fundamentally sound to witness growth. Notably, we have handpicked five such stocks that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Schnitzer Steel Industries, Inc. (SCHN - Free Report) recycles ferrous and nonferrous scrap metals; and manufactures finished steel products worldwide. The company currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings increased more than 100% over the past 60 days. The company’s expected earnings growth rate for the current year is more than 100%.

Applied Industrial Technologies, Inc. (AIT - Free Report) distributes industrial products in North America, Australia, New Zealand, and Singapore. The company offers its products for maintenance, repair, and operational, as well as original equipment manufacturing customers. It currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 11.3% over the past 60 days. The company’s expected earnings growth rate for next year is 7.8%.

International Paper Company (IP - Free Report) operates as a paper and packaging company primarily in United States, the Middle East, Europe, Africa, Pacific Rim, Asia, and the Americas. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 13.6% over the past 60 days. The company’s expected earnings growth rate for the current year is 36.1%.

EnPro Industries, Inc. (NPO - Free Report) designs, develops, manufactures, and markets engineered industrial products worldwide. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 1.4% over the past 60 days. The company’s expected earnings growth rate for the current year is 27.3%.

The Hain Celestial Group, Inc. (HAIN - Free Report) manufactures, markets, and sells organic and natural products in United States, United Kingdom, and internationally. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 1.6% over the past 60 days. The company’s expected earnings growth rate for the current year is 51.2%.

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