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4 Industrial Stocks to Grab on Robust Jump in Durable Goods Orders
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Key Takeaways
Durable goods orders rose 1.1% in July, driven by a 2.3% gain in transportation equipment.
Caterpillar expects 42.4% earnings growth, while Helios Technologies expects 24.6% this year.
Crane Company focuses on aerospace and defense, while Proto Labs makes custom parts for short-run production.
The manufacturing sector is making a steady recovery, driven by robust demand for goods. Although inflation remains a major concern, continued demand and a steady supply have been boosting the manufacturing sector.
The Commerce Department reported last week that orders for U.S. manufactured capital goods, made to last more than three years, jumped more than the analysts’ expectations in July.
Given the positive sentiment, it would be ideal to invest in four stocks from the manufacturing sector — Caterpillar Inc. (CAT - Free Report) , Helios Technologies, Inc. (HLIO - Free Report) , Crane Company (CR - Free Report) and Proto Labs, Inc. (PRLB - Free Report) — that we have detailed below.
Durable Goods Orders Jump
New orders for U.S.-manufactured durable goods totaled $ 339.3 billion in July, up 1.1% sequentially from an upwardly revised 0.5% rise in June, the Commerce Department reported. The July increase was also sharply higher than economists’ forecast of a 0.5% rise.
This was also the biggest jump in orders since April. The gains were primarily driven by robust orders for transportation equipment, which increased 2.3%. Orders for nondefense and defense aircraft parts rose 12.7% and 4.9%, respectively.
Excluding transportation, durable goods orders increased 0.4%. Also, orders for non-defense capital goods excluding aircraft rose 0.2%.
The jump in orders for durable goods comes as the manufacturing sector continues to make a steady recovery.
The ISM Manufacturing PMI climbed to 55.6 in July, up from 53.3 in June and higher than analysts’ expectations for a reading of 54. The latest figure marked the index’s strongest level since May 2022, when it reached 55.9.
July also extended the manufacturing sector’s growth streak to seven consecutive months, following 10 months of contraction. A reading above 50 indicates that the sector is expanding.
President Donald Trump’s tariffs have already been taking a toll on several sectors. The manufacturing sector has also been feeling price pressures due to higher costs of aluminum, steel and energy products linked to the ongoing conflict in the Middle East.
Oil prices have eased over the past two months but remain sharply higher than the pre-war period. Despite the pressures, orders remain high owing to robust demand, which bodes well for the overall manufacturing sector.
4 Industrial Products Stocks With Upside
Caterpillar
Caterpillar Inc. is the largest global construction and mining equipment manufacturer. Given that it serves a gamut of sectors — infrastructure, construction, mining, oil & gas and transportation — CAT is considered a bellwether of the global economy. Caterpillar has more than 4 million products with an extensive dealer network of 165 dealers, spanning 191 countries.
Caterpillar’s expected earnings growth for the current year is 42.4%. The Zacks Consensus Estimate for current-year earnings has improved 10.1% over the past 60 days. CAT currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Helios Technologies
Helios Technologies, Inc. is an industrial technology company. HLIO develops and manufactures hydraulic and electronic control solutions. Helios Technologies’ operating subsidiaries include Sun Hydraulics, Enovation Controls and Faster Group.
Helios Technologies’ expected earnings growth for the current year is 24.6%. The Zacks Consensus Estimate for next year's earnings has improved 10.4% over the past 60 days. Currently, HLIO has a Zacks Rank #1.
Crane Company
Crane Company is a leading manufacturer of highly engineered components for challenging, mission-critical applications focused on the aerospace, defense, space and process industry end markets. CR has two strategic growth platforms: Aerospace & Advanced Technologies and Process Flow Technologies.
Crane Company’s expected earnings growth for the current year is 15%. The Zacks Consensus Estimate for next year's earnings has improved 2.7% over the past 60 days. CR currently has a Zacks Rank #2 (Buy).
Proto Labs
Proto Labs, Inc. is an online and technology-enabled quick-turn manufacturer of custom parts for prototyping and short-run production. PRLB produces CNC-machined and injection-molded plastic parts.
Proto Labs’ expected earnings growth for the current year is 33.1%. The Zacks Consensus Estimate for current-year earnings has improved 6.8% over the past 60 days. PRLB currently carries a Zacks Rank #2.
View the Zacks #1 Rank List
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4 Industrial Stocks to Grab on Robust Jump in Durable Goods Orders
Key Takeaways
The manufacturing sector is making a steady recovery, driven by robust demand for goods. Although inflation remains a major concern, continued demand and a steady supply have been boosting the manufacturing sector.
The Commerce Department reported last week that orders for U.S. manufactured capital goods, made to last more than three years, jumped more than the analysts’ expectations in July.
Given the positive sentiment, it would be ideal to invest in four stocks from the manufacturing sector — Caterpillar Inc. (CAT - Free Report) , Helios Technologies, Inc. (HLIO - Free Report) , Crane Company (CR - Free Report) and Proto Labs, Inc. (PRLB - Free Report) — that we have detailed below.
Durable Goods Orders Jump
New orders for U.S.-manufactured durable goods totaled $ 339.3 billion in July, up 1.1% sequentially from an upwardly revised 0.5% rise in June, the Commerce Department reported. The July increase was also sharply higher than economists’ forecast of a 0.5% rise.
This was also the biggest jump in orders since April. The gains were primarily driven by robust orders for transportation equipment, which increased 2.3%. Orders for nondefense and defense aircraft parts rose 12.7% and 4.9%, respectively.
Excluding transportation, durable goods orders increased 0.4%. Also, orders for non-defense capital goods excluding aircraft rose 0.2%.
The jump in orders for durable goods comes as the manufacturing sector continues to make a steady recovery.
The ISM Manufacturing PMI climbed to 55.6 in July, up from 53.3 in June and higher than analysts’ expectations for a reading of 54. The latest figure marked the index’s strongest level since May 2022, when it reached 55.9.
July also extended the manufacturing sector’s growth streak to seven consecutive months, following 10 months of contraction. A reading above 50 indicates that the sector is expanding.
President Donald Trump’s tariffs have already been taking a toll on several sectors. The manufacturing sector has also been feeling price pressures due to higher costs of aluminum, steel and energy products linked to the ongoing conflict in the Middle East.
Oil prices have eased over the past two months but remain sharply higher than the pre-war period. Despite the pressures, orders remain high owing to robust demand, which bodes well for the overall manufacturing sector.
4 Industrial Products Stocks With Upside
Caterpillar
Caterpillar Inc. is the largest global construction and mining equipment manufacturer. Given that it serves a gamut of sectors — infrastructure, construction, mining, oil & gas and transportation — CAT is considered a bellwether of the global economy. Caterpillar has more than 4 million products with an extensive dealer network of 165 dealers, spanning 191 countries.
Caterpillar’s expected earnings growth for the current year is 42.4%. The Zacks Consensus Estimate for current-year earnings has improved 10.1% over the past 60 days. CAT currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Helios Technologies
Helios Technologies, Inc. is an industrial technology company. HLIO develops and manufactures hydraulic and electronic control solutions. Helios Technologies’ operating subsidiaries include Sun Hydraulics, Enovation Controls and Faster Group.
Helios Technologies’ expected earnings growth for the current year is 24.6%. The Zacks Consensus Estimate for next year's earnings has improved 10.4% over the past 60 days. Currently, HLIO has a Zacks Rank #1.
Crane Company
Crane Company is a leading manufacturer of highly engineered components for challenging, mission-critical applications focused on the aerospace, defense, space and process industry end markets. CR has two strategic growth platforms: Aerospace & Advanced Technologies and Process Flow Technologies.
Crane Company’s expected earnings growth for the current year is 15%. The Zacks Consensus Estimate for next year's earnings has improved 2.7% over the past 60 days. CR currently has a Zacks Rank #2 (Buy).
Proto Labs
Proto Labs, Inc. is an online and technology-enabled quick-turn manufacturer of custom parts for prototyping and short-run production. PRLB produces CNC-machined and injection-molded plastic parts.
Proto Labs’ expected earnings growth for the current year is 33.1%. The Zacks Consensus Estimate for current-year earnings has improved 6.8% over the past 60 days. PRLB currently carries a Zacks Rank #2.