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4 Stocks to Buy on Continued Growth in Industrial Production
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Production levels at U.S. factories rose for the third straight month in September, driven by growth in manufacturing activity. Higher demand for consumer goods is driving manufacturing activity.
Steady growth in industrial production and output also indicates that the manufacturing sector still hasn’t crumbled in the face of soaring inflation. This proves that the economy is still on solid ground and that higher demand is helping boost production at American factories. Given this scenario, industrial stocks like Hubbell Incorporated (HUBB - Free Report) , Graham Corporation (GHM - Free Report) , Twin Disc, Incorporated (TWIN - Free Report) and Standex International Corporation (SXI - Free Report) are expected to benefit in the near term.
Industrial Production Increases
The Fed said on Oct 18 that industrial production rose 0.4% in September, beating analysts’ expectations of a rise of 0.1%. Industrial production has now increased for three consecutive months, indicating that higher demand for consumer durables is helping boost manufacturing activity at U.S. factories.
The better-than-expected jump in industrial production came as manufacturing output jumped a solid 0.4% in September, matching the increase witnessed in August.
Paul Ashworth, Chief North America Economist at Capital Economics, said, “The 0.4% month-over-month gain in manufacturing output in September, together with some modest upward revisions to previous months, suggests that the factory sector is just about holding up despite the deterioration in the global manufacturing outlook - particularly in China and Europe.”
The Fed said that mining activity also increased a solid 0.6% in September. Besides, capacity utilization in U.S. industries also advanced to 80.3% last month from an upwardly revised 80.1% in August.
Manufacturing Sector Facing Challenges
The 0.4% rise in manufacturing output in September matched the growth in August. Capacity utilization increased in the manufacturing and mining sectors, reaching 80% and 88.8%, respectively.
The pandemic saw people spending more on goods, which resulted in the manufacturing sector growing at a fast pace. However, people have once again started spending more on services, which has somewhat slowed down manufacturing activity. Even then, demand for consumer goods is higher, which is making people spend despite soaring prices.
Amid all these odds, the industrial sector has been performing quite well. Despite months of supply-chain pressures and increased input costs, the sector has been able to overcome the difficulties.
Also, higher crude oil prices have prompted gasoline costs to hit record highs, which are driving the output at mines.
As people resume their jobs, employment in the United States is once more increasing. Higher employment means more income and purchasing power. Therefore, it is likely that the demand for consumer goods produced in American factories will continue to rise in the near future as people get the confidence to spend more.
Our Choices
Given this scenario, it would be ideal to invest in the four stocks we have picked below.Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Hubbell Incorporated is engaged in the design, manufacture and sale of electrical and electronic products to commercial, industrial, utility and telecommunications markets. HUBB’s products include plugs, receptacles, connectors, lighting fixtures, high-voltage test and measurement equipment, and voice and data signal processing components.
Hubbell Incorporated’s expected earnings growth for the current year is 22.1%. The Zacks Consensus Estimate for current-year earnings has improved 5% over the past 90 days. HUBB at present sports a Zacks Rank #1.
Graham Corporation designs and builds vacuum and heat transfer equipment for process industries and energy markets worldwide. GHM’s products include steam jet ejector vacuum systems and liquid ring vacuum pumps, surface condensers, Heliflows, water heaters, and various types of heat exchangers.
Graham Corporation’s expected earnings growth for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the past 90 days. GHM currently has a Zacks Rank #2.
Twin Disc, Incorporated designs, manufactures and sells heavy-duty off-highway power transmission equipment. Products offered by TWIN include hydraulic torque converters; power-shift transmissions; marine transmissions and surface drives; universal joints; gas turbine starting drives; power take-offs and reduction gears; industrial clutches; fluid couplings and control systems.
Twin Disc’ expected earnings growth for the current year is 95%. The Zacks Consensus Estimate for current-year earnings has improved 5.4% over the past 60 days. Presently, TWIN carries a Zacks Rank #1.
Standex International Corporation is a diversified manufacturer producing and marketing a wide variety of useful, quality products. SXI enjoys a broad and well-balanced earnings base by virtue of its strong market position in selected areas of operation.
Standex International Corporation’s expected earnings growth for the current year is 18.4%. The Zacks Consensus Estimate for current-year earnings has improved 3.6% over the past 60 days. Presently, SXI has a Zacks Rank #2.
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4 Stocks to Buy on Continued Growth in Industrial Production
Production levels at U.S. factories rose for the third straight month in September, driven by growth in manufacturing activity. Higher demand for consumer goods is driving manufacturing activity.
Steady growth in industrial production and output also indicates that the manufacturing sector still hasn’t crumbled in the face of soaring inflation. This proves that the economy is still on solid ground and that higher demand is helping boost production at American factories. Given this scenario, industrial stocks like Hubbell Incorporated (HUBB - Free Report) , Graham Corporation (GHM - Free Report) , Twin Disc, Incorporated (TWIN - Free Report) and Standex International Corporation (SXI - Free Report) are expected to benefit in the near term.
Industrial Production Increases
The Fed said on Oct 18 that industrial production rose 0.4% in September, beating analysts’ expectations of a rise of 0.1%. Industrial production has now increased for three consecutive months, indicating that higher demand for consumer durables is helping boost manufacturing activity at U.S. factories.
The better-than-expected jump in industrial production came as manufacturing output jumped a solid 0.4% in September, matching the increase witnessed in August.
Paul Ashworth, Chief North America Economist at Capital Economics, said, “The 0.4% month-over-month gain in manufacturing output in September, together with some modest upward revisions to previous months, suggests that the factory sector is just about holding up despite the deterioration in the global manufacturing outlook - particularly in China and Europe.”
The Fed said that mining activity also increased a solid 0.6% in September. Besides, capacity utilization in U.S. industries also advanced to 80.3% last month from an upwardly revised 80.1% in August.
Manufacturing Sector Facing Challenges
The 0.4% rise in manufacturing output in September matched the growth in August. Capacity utilization increased in the manufacturing and mining sectors, reaching 80% and 88.8%, respectively.
The pandemic saw people spending more on goods, which resulted in the manufacturing sector growing at a fast pace. However, people have once again started spending more on services, which has somewhat slowed down manufacturing activity. Even then, demand for consumer goods is higher, which is making people spend despite soaring prices.
Amid all these odds, the industrial sector has been performing quite well. Despite months of supply-chain pressures and increased input costs, the sector has been able to overcome the difficulties.
Also, higher crude oil prices have prompted gasoline costs to hit record highs, which are driving the output at mines.
As people resume their jobs, employment in the United States is once more increasing. Higher employment means more income and purchasing power. Therefore, it is likely that the demand for consumer goods produced in American factories will continue to rise in the near future as people get the confidence to spend more.
Our Choices
Given this scenario, it would be ideal to invest in the four stocks we have picked below.Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Hubbell Incorporated is engaged in the design, manufacture and sale of electrical and electronic products to commercial, industrial, utility and telecommunications markets. HUBB’s products include plugs, receptacles, connectors, lighting fixtures, high-voltage test and measurement equipment, and voice and data signal processing components.
Hubbell Incorporated’s expected earnings growth for the current year is 22.1%. The Zacks Consensus Estimate for current-year earnings has improved 5% over the past 90 days. HUBB at present sports a Zacks Rank #1.
Graham Corporation designs and builds vacuum and heat transfer equipment for process industries and energy markets worldwide. GHM’s products include steam jet ejector vacuum systems and liquid ring vacuum pumps, surface condensers, Heliflows, water heaters, and various types of heat exchangers.
Graham Corporation’s expected earnings growth for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the past 90 days. GHM currently has a Zacks Rank #2.
Twin Disc, Incorporated designs, manufactures and sells heavy-duty off-highway power transmission equipment. Products offered by TWIN include hydraulic torque converters; power-shift transmissions; marine transmissions and surface drives; universal joints; gas turbine starting drives; power take-offs and reduction gears; industrial clutches; fluid couplings and control systems.
Twin Disc’ expected earnings growth for the current year is 95%. The Zacks Consensus Estimate for current-year earnings has improved 5.4% over the past 60 days. Presently, TWIN carries a Zacks Rank #1.
Standex International Corporation is a diversified manufacturer producing and marketing a wide variety of useful, quality products. SXI enjoys a broad and well-balanced earnings base by virtue of its strong market position in selected areas of operation.
Standex International Corporation’s expected earnings growth for the current year is 18.4%. The Zacks Consensus Estimate for current-year earnings has improved 3.6% over the past 60 days. Presently, SXI has a Zacks Rank #2.