Back to top

4 Stocks to Benefit From Higher U.S. Durable Goods Order

Read MoreHide Full Article

Amid a gloomy equity market when leading benchmark indices saw considerable decline on Friday, the U.S. Commerce Department’s better-than-expected orders for capital goods for February appeared as a silver lining. As the United States locks horns with China in a murky trade war, investors expect that a healthy rebound in capital goods order, after two months of decline, would help in stabilizing the economy.

Whether this will be able to indeed revive businesses by and large remains to be seen.

Surge in Orders

According to the Commerce Department report, durable goods order increased 3.1% in February against expectations of a 1.5% rise, largely driven by higher orders for transportation equipment, which improved 7.1%. Excluding the volatile order schedule for transportation equipment, orders were up 1.2% owing to higher demand for primary metals, machinery, electrical equipment, appliances and components. Core capital goods shipments were up 1.4%, the highest since December 2016.

Non-defense capital goods order, excluding aircraft, improved 1.8% in February following a 0.4% fall in January, marking the biggest gain in five months. This is usually an ideal indicator of business spending plans. Also, the current spike in orders probably offers a cue to economists to raise the GDP outlook for the first quarter of the year. This, in turn, could have a ripple effect across the broader equity market and lead to a healthy rally in shares.

Ride the Tide

Fueled by domestic business investments, improving global economies and weakening dollar, manufacturing activity is likely to move north in the near future — serving as a precursor to solid economic growth momentum. Enjoying the fruits of a resurgent job market, consumer confidence is also expected to hold its fort. The Conference Board Consumer Confidence index increased to 130.8 in February from 124.3 in January, signifying optimism about the U.S. economy and is likely to rise further in March.

4 Business Services Stocks to Profit

In order to benefit from the current market scenario, we have picked a handful of priceless Business Services stocks that have a solid Zacks Rank and a VGM Score of A or B with the help of the Zacks Stock Screener.

CRA International, Inc. (CRAI - Free Report) : Headquartered in Boston, MA, CRA International provides legal, regulatory, business consulting and other expert services through its specialized consultants across the globe. These include advice for mergers and acquisitions, new product introductions, major capital investment decisions and complex litigation, the results of which often have significant consequences for the parties involved. This Zacks Rank #1 (Strong Buy) stock has a VGM Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here. The stock surpassed estimates thrice in the trailing four quarters, recording a positive average earnings surprise of 28%.

The Interpublic Group of Companies, Inc. (IPG - Free Report) : New York-based Interpublic Group of Companies provides advertising and marketing services worldwide. The company is reportedly the third largest advertising firm in the world. This Zacks Rank #2 (Buy) stock has a VGM Score of A with long-term earnings growth expectation of 6.7%. The stock surpassed estimates twice in the trailing four quarters, recording a positive average earnings surprise of 31.5%.

ManpowerGroup Inc. (MAN - Free Report) : Headquartered in Milwaukee, WI, ManpowerGroup is the global leader in the employment services industry and has a well-established network of 2,900 offices in 80 countries. This Zacks Rank #1 stock has a VGM Score of B. The stock surpassed estimates thrice in the trailing four quarters, recording a positive average earnings surprise of 2.7%.

Robert Half International Inc. (RHI - Free Report) : Headquartered in CA, Robert Half International is one of the world’s largest providers of temporary staffing, project professionals and permanent placement services to the finance and accounting industries. This Zacks Rank #2 stock has a VGM Score of B. The stock surpassed estimates twice in the trailing four quarters, recording a positive average earnings surprise of 1.8%.

Moving Forward

As the equity markets appear quite shaky due to a cross-border economic impact, betting on some outperformers with solid Zacks Rank and healthy fundamentals could be a great idea for investors. These stocks seem to hold great promise for the future and are likely to reward shareholders generously.

5 Medical Stocks to Buy Now

Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.

New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.

Click here to see the 5 stocks >>



More from Zacks Analyst Blog

You May Like

Published in