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Durable Goods Orders Rise in March: 4 Solid Stocks to Buy
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Demand for long-lasting durable goods rebounded in March after unexpectedly declining in the prior month. This shows that the U.S. economy is on solid ground despite growing concerns over rising inflation.
People have cut down on spending on goods owing to rising costs, but that doesn’t seem to have impacted the manufacturing sector as demand for durable goods is on the rise. This proves that people are willing to spend if there is demand. Given this scenario, stocks like Roper Technologies, Inc. (ROP - Free Report) , Ferguson plc (FERG - Free Report) , Titan International, Inc. and Zebra Technologies Corporation (ZBRA - Free Report) are expected to gain in the near term.
Durable Goods Orders Rise
The Commerce Department said on Apr 26 that new orders and shipments for U.S.-made capital goods rose in March. New orders for durable goods jumped 0.8% in March. Although this is slightly lower than economists’ expectations of 1%, it is well above the unexpected 2.2% decline initially reported in February.
Durable goods orders, excluding orders for transportation equipment, rose 1.1% in March after declining 0.5% in February. This reflects a significant rise in orders for electrical equipment, computers and electronic items, primary metals and appliances and components.
Orders for computers and electronic goods increased 2.6%, while electrical equipment and appliances grew a solid 3.9%. Orders for motor vehicles and parts increased 5% despite the ongoing shortage of semiconductors.
Economic Growth on Track
Orders for long-lasting U.S-made durable goods have increased in five of the past six months. This shows that despite rising prices, people are willing to spend, which has seen a steady rise in demand for durable goods.
Also, orders for non-defense capital goods excluding aircraft, which is an indicator of business spending, rose 1% in March after declining 0.3% in February. Moreover, shipments for durable goods rose 0.2% in March.
Raw material shortage and rising prices coupled with the supply chain crisis have been growing concerns but that hasn’t dented the confidence of those willing to spend. This, at the same time, shows the underlying strength of the economy.
Moreover, with inventories at historically low levels, orders for core capital goods are expected to remain solid in the coming months, assisting the manufacturing sector, which accounts for 11.9% of the economy.
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 four 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.
Roper Technologies, Inc. designs, manufactures and distributes engineered products and solutions as well as software. ROP caters to the selected segments of a broad range of markets, which include legal, healthcare, government, food, transportation, oil & gas, medical, and other niche industries. In March 2019, Roper Technologies restructured its business segments and currently operates under these four segments — Application Software, Network Software & Systems, Measurement & Analytical Solutions, and Process Technologies.
Roper Technologies’ expected earnings growth rate for the current year is 9.10%. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the past 60 days. ROP has a Zacks Rank #2.
Ferguson plc Ferguson plc is a distributor of plumbing and heating products to professional contractors and consumers primarily in the USA, UK, Nordics, Canada and Central Europe. FERG serves customers in the residential, commercial, civil/infrastructure, and industrial end sectors with plumbing and heating solutions.
Ferguson’s expected earnings growth rate for the current year is 29.7%. The Zacks Consensus Estimate for current-year earnings has improved 7% over the past 60 days. FERG has a Zacks Rank #2.
Titan International, Inc. is a leading global manufacturer of off-highway wheels, tires, assemblies, and undercarriage products. TWI globally produces a broad range of products to meet the specifications of original equipment manufacturers and aftermarket customers in the agricultural, earthmoving/construction, and consumer markets.
Titan International’s expected earnings growth rate for the current year is 36.5%. The Zacks Consensus Estimate for current-year earnings has improved 19.6% over the past 60 days. TWI sports a Zacks Rank #1.
Zebra Technologies Corporation is the leading provider of enterprise asset intelligence solutions in the automatic identification and data capture solutions industry throughout the world. ZBRA has a diversified portfolio of products and solutions that includes cloud-based subscriptions and a full range of services like maintenance, repair, technical support, and managed and professional services. Zebra Technologies’products and solutions, which are sold across 180 countries, are designed to help its customers achieve enhanced operational efficiency, increased asset utilization, optimized workflows and improved regulatory compliance.
Zebra Technologies’ expected earnings growth rate for the current year is 7.2%. The Zacks Consensus Estimate for current-year earnings has improved 1.6% over the past 60 days. ZBRA carries a Zacks Rank #2.
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Durable Goods Orders Rise in March: 4 Solid Stocks to Buy
Demand for long-lasting durable goods rebounded in March after unexpectedly declining in the prior month. This shows that the U.S. economy is on solid ground despite growing concerns over rising inflation.
People have cut down on spending on goods owing to rising costs, but that doesn’t seem to have impacted the manufacturing sector as demand for durable goods is on the rise. This proves that people are willing to spend if there is demand. Given this scenario, stocks like Roper Technologies, Inc. (ROP - Free Report) , Ferguson plc (FERG - Free Report) , Titan International, Inc. and Zebra Technologies Corporation (ZBRA - Free Report) are expected to gain in the near term.
Durable Goods Orders Rise
The Commerce Department said on Apr 26 that new orders and shipments for U.S.-made capital goods rose in March. New orders for durable goods jumped 0.8% in March. Although this is slightly lower than economists’ expectations of 1%, it is well above the unexpected 2.2% decline initially reported in February.
Durable goods orders, excluding orders for transportation equipment, rose 1.1% in March after declining 0.5% in February. This reflects a significant rise in orders for electrical equipment, computers and electronic items, primary metals and appliances and components.
Orders for computers and electronic goods increased 2.6%, while electrical equipment and appliances grew a solid 3.9%. Orders for motor vehicles and parts increased 5% despite the ongoing shortage of semiconductors.
Economic Growth on Track
Orders for long-lasting U.S-made durable goods have increased in five of the past six months. This shows that despite rising prices, people are willing to spend, which has seen a steady rise in demand for durable goods.
Also, orders for non-defense capital goods excluding aircraft, which is an indicator of business spending, rose 1% in March after declining 0.3% in February. Moreover, shipments for durable goods rose 0.2% in March.
Raw material shortage and rising prices coupled with the supply chain crisis have been growing concerns but that hasn’t dented the confidence of those willing to spend. This, at the same time, shows the underlying strength of the economy.
Moreover, with inventories at historically low levels, orders for core capital goods are expected to remain solid in the coming months, assisting the manufacturing sector, which accounts for 11.9% of the economy.
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 four 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.
Roper Technologies, Inc. designs, manufactures and distributes engineered products and solutions as well as software. ROP caters to the selected segments of a broad range of markets, which include legal, healthcare, government, food, transportation, oil & gas, medical, and other niche industries. In March 2019, Roper Technologies restructured its business segments and currently operates under these four segments — Application Software, Network Software & Systems, Measurement & Analytical Solutions, and Process Technologies.
Roper Technologies’ expected earnings growth rate for the current year is 9.10%. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the past 60 days. ROP has a Zacks Rank #2.
Ferguson plc Ferguson plc is a distributor of plumbing and heating products to professional contractors and consumers primarily in the USA, UK, Nordics, Canada and Central Europe. FERG serves customers in the residential, commercial, civil/infrastructure, and industrial end sectors with plumbing and heating solutions.
Ferguson’s expected earnings growth rate for the current year is 29.7%. The Zacks Consensus Estimate for current-year earnings has improved 7% over the past 60 days. FERG has a Zacks Rank #2.
Titan International, Inc. is a leading global manufacturer of off-highway wheels, tires, assemblies, and undercarriage products. TWI globally produces a broad range of products to meet the specifications of original equipment manufacturers and aftermarket customers in the agricultural, earthmoving/construction, and consumer markets.
Titan International’s expected earnings growth rate for the current year is 36.5%. The Zacks Consensus Estimate for current-year earnings has improved 19.6% over the past 60 days. TWI sports a Zacks Rank #1.
Zebra Technologies Corporation is the leading provider of enterprise asset intelligence solutions in the automatic identification and data capture solutions industry throughout the world. ZBRA has a diversified portfolio of products and solutions that includes cloud-based subscriptions and a full range of services like maintenance, repair, technical support, and managed and professional services. Zebra Technologies’products and solutions, which are sold across 180 countries, are designed to help its customers achieve enhanced operational efficiency, increased asset utilization, optimized workflows and improved regulatory compliance.
Zebra Technologies’ expected earnings growth rate for the current year is 7.2%. The Zacks Consensus Estimate for current-year earnings has improved 1.6% over the past 60 days. ZBRA carries a Zacks Rank #2.