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4 Stocks to Buy on Rebound in Industrial Production in March
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Production levels at U.S. factories increased in March even amid shrinking manufacturing activity. However, the good sign is that despite rising raw materials costs and inflationary pressures, production at factories is on the rise.
This, at the same time, also proves that there is substantial demand for goods, which is boosting production at factories. Although manufacturing activity has slowed over the past few months, the sector is still trying to put up a fight during this challenging time. Given this scenario, industrial stocks like Hubbell Incorporated (HUBB - Free Report) , Barnes Group Inc. (B - Free Report) , Flowserve Corporation (FLS - Free Report) and Ingersoll Rand Inc. (IR - Free Report) are expected to benefit in the near term.
Industrial Production Rebounds
On Apr 14, the Fed said that industrial production rose 0.4% in March, beating economists’ expectations of a rise of 0.2%. On a year-over-year basis, industrial production rose 0.5% in the same month.
Manufacturing output declined 0.5% in March, but the good sign is that factories are still receiving orders for goods, given that demand remains high. March’s jump follows a 0.2% rise in industrial output in February.
Capacity utilization, which indicates overall demand and growth in the economy, jumped 0.2% to 79.8% in March, beating analysts’ expectations of 79.1%. This once again shows the underlying strength of the economy.
Manufacturing Sector Facing Challenges
March’s rise in industrial production was primarily driven by a jump in utility output. Moreover, industrial output, excluding autos and parts, rose 0.5% in March.
The manufacturing sector has been facing several challenges, especially soaring raw material costs. However, the sector is still putting up a decent show and is trying to overcome the challenges.
The report also mentions that production levels have been improving over the past few months. Industrial production was up 0.2% in the first quarter of 2023, after declining 2.5% in the final quarter of last year.
The manufacturing sector expanded leaps and bounds during the peak of the pandemic on increased consumer spending on goods. However, consumer spending began to shift toward services once the pandemic-related restrictions were lifted and the economy started reopening. This partly slowed manufacturing activity.
However, despite rising prices, there is still stronger demand for consumer products, which is encouraging spending. The sector has managed to survive the challenges despite supply-chain pressures and rising input costs for months.
Moreover, the U.S. labor market is resilient and job hirings are still at a high level. This is another factor that is helping people spend.
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 6.1%. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the past 60 days. HUBB carries a Zacks Rank #2.
Barnes Group Inc. is a global diversified manufacturer and provider of highly engineered products, innovative solutions and differentiated industrial technologies. B’s product and solution offerings include plastic injection molding technologies, robotic grippers, automation components, fine-blanked solutions, high-performance precision components and engineering solutions.
Barnes Group’sexpected earnings growth for the current year is 8.6%. The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the past 60 days. B carries a Zacks Rank #2.
Flowserve Corporation is a leading manufacturer and aftermarket service provider of comprehensive flow control systems, globally. FLS develops and manufactures precision-engineered flow control equipment, such as pumps, valves and seals, for critical service applications that require high reliability. Flowserve uses its manufacturing platform to offer a broad array of aftermarket equipment services, such as installation, advanced diagnostics, repair and retrofitting.
Flowserve Corporation’s expected earnings growth for the current year is 52.7%. The Zacks Consensus Estimate for current-year earnings has improved 1.8% over the past 60 days. FLS currently has a Zacks Rank #2.
Ingersoll Rand Inc. is a global industrial company, with expertise in industrial and mission-critical flow creation technologies. IR came into existence when Gardner Denver Holdings, Inc. acquired the Industrial segment of Ingersoll-Rand plc in February 2020.
Ingersoll Rand’s expected earnings growth for the current year is 7.2%. The Zacks Consensus Estimate for current-year earnings has improved 4.1% over the past 60 days. IR currently sports a Zacks Rank #1.
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4 Stocks to Buy on Rebound in Industrial Production in March
Production levels at U.S. factories increased in March even amid shrinking manufacturing activity. However, the good sign is that despite rising raw materials costs and inflationary pressures, production at factories is on the rise.
This, at the same time, also proves that there is substantial demand for goods, which is boosting production at factories. Although manufacturing activity has slowed over the past few months, the sector is still trying to put up a fight during this challenging time. Given this scenario, industrial stocks like Hubbell Incorporated (HUBB - Free Report) , Barnes Group Inc. (B - Free Report) , Flowserve Corporation (FLS - Free Report) and Ingersoll Rand Inc. (IR - Free Report) are expected to benefit in the near term.
Industrial Production Rebounds
On Apr 14, the Fed said that industrial production rose 0.4% in March, beating economists’ expectations of a rise of 0.2%. On a year-over-year basis, industrial production rose 0.5% in the same month.
Manufacturing output declined 0.5% in March, but the good sign is that factories are still receiving orders for goods, given that demand remains high. March’s jump follows a 0.2% rise in industrial output in February.
Capacity utilization, which indicates overall demand and growth in the economy, jumped 0.2% to 79.8% in March, beating analysts’ expectations of 79.1%. This once again shows the underlying strength of the economy.
Manufacturing Sector Facing Challenges
March’s rise in industrial production was primarily driven by a jump in utility output. Moreover, industrial output, excluding autos and parts, rose 0.5% in March.
The manufacturing sector has been facing several challenges, especially soaring raw material costs. However, the sector is still putting up a decent show and is trying to overcome the challenges.
The report also mentions that production levels have been improving over the past few months. Industrial production was up 0.2% in the first quarter of 2023, after declining 2.5% in the final quarter of last year.
The manufacturing sector expanded leaps and bounds during the peak of the pandemic on increased consumer spending on goods. However, consumer spending began to shift toward services once the pandemic-related restrictions were lifted and the economy started reopening. This partly slowed manufacturing activity.
However, despite rising prices, there is still stronger demand for consumer products, which is encouraging spending. The sector has managed to survive the challenges despite supply-chain pressures and rising input costs for months.
Moreover, the U.S. labor market is resilient and job hirings are still at a high level. This is another factor that is helping people spend.
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 6.1%. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the past 60 days. HUBB carries a Zacks Rank #2.
Barnes Group Inc. is a global diversified manufacturer and provider of highly engineered products, innovative solutions and differentiated industrial technologies. B’s product and solution offerings include plastic injection molding technologies, robotic grippers, automation components, fine-blanked solutions, high-performance precision components and engineering solutions.
Barnes Group’sexpected earnings growth for the current year is 8.6%. The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the past 60 days. B carries a Zacks Rank #2.
Flowserve Corporation is a leading manufacturer and aftermarket service provider of comprehensive flow control systems, globally. FLS develops and manufactures precision-engineered flow control equipment, such as pumps, valves and seals, for critical service applications that require high reliability. Flowserve uses its manufacturing platform to offer a broad array of aftermarket equipment services, such as installation, advanced diagnostics, repair and retrofitting.
Flowserve Corporation’s expected earnings growth for the current year is 52.7%. The Zacks Consensus Estimate for current-year earnings has improved 1.8% over the past 60 days. FLS currently has a Zacks Rank #2.
Ingersoll Rand Inc. is a global industrial company, with expertise in industrial and mission-critical flow creation technologies. IR came into existence when Gardner Denver Holdings, Inc. acquired the Industrial segment of Ingersoll-Rand plc in February 2020.
Ingersoll Rand’s expected earnings growth for the current year is 7.2%. The Zacks Consensus Estimate for current-year earnings has improved 4.1% over the past 60 days. IR currently sports a Zacks Rank #1.