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5 Industrial Products Stocks to Buy on Jump in Durable Goods Orders
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The U.S. manufacturing sector is making a rebound after months of slowdown in activity. Easing price pressures is boosting demand, which is driving orders at U.S. factories and leading to higher production.
The Commerce Department said on Apr 24 that orders for U.S. manufactured goods made to last more than three years rose 2.6% in March, slightly above the consensus estimate of a rise of 2.5%.
However, durable goods orders for February were revised down from 1.4% to 0.7%, indicating that although manufacturing activity picked up, it remained slow in the first quarter.
The jump in March can be attributed to a 31% surge in orders for Boeing aircraft.
Non-defense capital goods orders, excluding aircraft, rose 0.2%, which was in line with analysts’ expectations. Although the rise is moderate, the good sign is that orders are again climbing after slowing down for months as higher borrowing costs dried up demand.
The Federal Reserve increased interest rates by 525 basis points to take its benchmark policy rate to the current range of 5.25-5.5% in its bid to combat 40-year-high inflation.
The Federal Reserve’s aggressive stance weighed on the economy, with the manufacturing sector suffering through 2023.
However, the measure saw inflation decline sharply from its peak of 9.1% in June 2022. Although inflation remains above the Fed’s 2% target, price pressures have eased substantially over the past year.
This has seen orders rebounding in the first quarter. This came as the Federal Reserve reported last week that industrial production increased 0.4% in March, while manufacturing output increased 0.5%.
Also, the Institute for Supply Management’s (ISM) survey showed that its manufacturing PMI rose to 50.3 in March, the highest reading above 50 since September 2022. Any reading above 50 indicates expansion in manufacturing activity.
Our Choices
Given this scenario, it would be ideal to invest in the five stocks we have picked below. These stocks have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and assure good returns. You can see the complete list of today’s Zacks #1 Rank stocks here.
Xerox Holdings Corporation (XRX - Free Report) is a leader in the contractual print and document services market. XRX has developed one of the industry’s strongest portfolios of managed print service solutions and services. Xerox’s strategy is to use data-centric technologies to better help customers in their digital transformation journey, taking advantage of the changing market conditions.
Xerox’s expected earnings growth for the current year is 26.9%. The Zacks Consensus Estimate for current-year earnings has improved 1.8% over the past 60 days. XRX presently has a Zacks Rank #2.
Lakeland Industries, Inc. (LAKE - Free Report) has five divisions and three wholly-owned subsidiaries. One large division of LAKE manufactures disposable/limited-use garments. The four smaller divisions are Chemland, which manufactures suits for toxic waste clean-up teams, Fireland Fyrepel Products, which manufactures fire and heat protective apparel and protective systems for personnel, Highland, which manufactures specialty safety and industrial work gloves, and Uniland, which manufactures industrial and medical woven cloth garments.
Lakeland Industries’ expected earnings growth for the current year is 63.6%. The Zacks Consensus Estimate for current-year earnings has improved 38.9% over the last 60 days. LAKE currently sports a Zacks Rank #1.
Chart Industries, Inc. (GTLS - Free Report) is a leading independent global manufacturer of highly engineered equipment servicing end-market applications in Energy, Industry, Life Sciences and Respiratory Healthcare with a unique business portfolio. GTLS’ equipment is used in the production, storage, distribution and end-use of atmospheric, hydrocarbon and industrial gases.
Chart Industries’ expected earnings growth for the current year is 96.7%. The Zacks Consensus Estimate for current-year earnings has improved 6.4% over the past 60 days. GTLS presently has a Zacks Rank #2.
Applied Industrial Technologies, Inc. (AIT - Free Report) is a distributor of value-added industrial products — including engineered fluid power components, bearings, specialty flow control solutions, power transmission products and miscellaneous industrial supplies. AIT’s products are mainly sold to original equipment manufacturers, and maintenance, repair and operations customers in Australia, North America, Singapore and New Zealand.
Applied Industrial Technologies’ expected earnings growth for the current year is 8.5%. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the past 60 days. AIT currently sports a Zacks Rank #1.
Hubbell Incorporated (HUBB - Free Report) 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 7.5%. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the past 60 days. HUBB currently carries a Zacks Rank #2.
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5 Industrial Products Stocks to Buy on Jump in Durable Goods Orders
The U.S. manufacturing sector is making a rebound after months of slowdown in activity. Easing price pressures is boosting demand, which is driving orders at U.S. factories and leading to higher production.
The Commerce Department said on Apr 24 that orders for U.S. manufactured goods made to last more than three years rose 2.6% in March, slightly above the consensus estimate of a rise of 2.5%.
However, durable goods orders for February were revised down from 1.4% to 0.7%, indicating that although manufacturing activity picked up, it remained slow in the first quarter.
The jump in March can be attributed to a 31% surge in orders for Boeing aircraft.
Non-defense capital goods orders, excluding aircraft, rose 0.2%, which was in line with analysts’ expectations. Although the rise is moderate, the good sign is that orders are again climbing after slowing down for months as higher borrowing costs dried up demand.
The Federal Reserve increased interest rates by 525 basis points to take its benchmark policy rate to the current range of 5.25-5.5% in its bid to combat 40-year-high inflation.
The Federal Reserve’s aggressive stance weighed on the economy, with the manufacturing sector suffering through 2023.
However, the measure saw inflation decline sharply from its peak of 9.1% in June 2022. Although inflation remains above the Fed’s 2% target, price pressures have eased substantially over the past year.
This has seen orders rebounding in the first quarter. This came as the Federal Reserve reported last week that industrial production increased 0.4% in March, while manufacturing output increased 0.5%.
Also, the Institute for Supply Management’s (ISM) survey showed that its manufacturing PMI rose to 50.3 in March, the highest reading above 50 since September 2022. Any reading above 50 indicates expansion in manufacturing activity.
Our Choices
Given this scenario, it would be ideal to invest in the five stocks we have picked below. These stocks have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and assure good returns. You can see the complete list of today’s Zacks #1 Rank stocks here.
Xerox Holdings Corporation (XRX - Free Report) is a leader in the contractual print and document services market. XRX has developed one of the industry’s strongest portfolios of managed print service solutions and services. Xerox’s strategy is to use data-centric technologies to better help customers in their digital transformation journey, taking advantage of the changing market conditions.
Xerox’s expected earnings growth for the current year is 26.9%. The Zacks Consensus Estimate for current-year earnings has improved 1.8% over the past 60 days. XRX presently has a Zacks Rank #2.
Lakeland Industries, Inc. (LAKE - Free Report) has five divisions and three wholly-owned subsidiaries. One large division of LAKE manufactures disposable/limited-use garments. The four smaller divisions are Chemland, which manufactures suits for toxic waste clean-up teams, Fireland Fyrepel Products, which manufactures fire and heat protective apparel and protective systems for personnel, Highland, which manufactures specialty safety and industrial work gloves, and Uniland, which manufactures industrial and medical woven cloth garments.
Lakeland Industries’ expected earnings growth for the current year is 63.6%. The Zacks Consensus Estimate for current-year earnings has improved 38.9% over the last 60 days. LAKE currently sports a Zacks Rank #1.
Chart Industries, Inc. (GTLS - Free Report) is a leading independent global manufacturer of highly engineered equipment servicing end-market applications in Energy, Industry, Life Sciences and Respiratory Healthcare with a unique business portfolio. GTLS’ equipment is used in the production, storage, distribution and end-use of atmospheric, hydrocarbon and industrial gases.
Chart Industries’ expected earnings growth for the current year is 96.7%. The Zacks Consensus Estimate for current-year earnings has improved 6.4% over the past 60 days. GTLS presently has a Zacks Rank #2.
Applied Industrial Technologies, Inc. (AIT - Free Report) is a distributor of value-added industrial products — including engineered fluid power components, bearings, specialty flow control solutions, power transmission products and miscellaneous industrial supplies. AIT’s products are mainly sold to original equipment manufacturers, and maintenance, repair and operations customers in Australia, North America, Singapore and New Zealand.
Applied Industrial Technologies’ expected earnings growth for the current year is 8.5%. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the past 60 days. AIT currently sports a Zacks Rank #1.
Hubbell Incorporated (HUBB - Free Report) 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 7.5%. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the past 60 days. HUBB currently carries a Zacks Rank #2.