We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
4 Stocks to Boost Your Portfolio on Steady Growth in Factory Orders
Read MoreHide Full Article
Key Takeaways
CAT, ZBRA, AIT and HLIO are positioned to benefit from steady manufacturing demand.
CAT expects 43.6% earnings growth, while ZBRA projects 28.2% growth this year.
AIT expects 9.2% earnings growth, while HLIO projects 24.6% growth this year.
The U.S. manufacturing sector is making a steady recovery amid inflationary pressures. New orders for U.S. factory goods rose in August, boosted by robust demand despite higher prices.
Oil prices have surged over the past six months owing to the ongoing crisis in the Middle East. This has seen prices of raw materials jump at an alarming pace. However, demand remained high for electrical equipment and appliances as well as their components in August, which drove new orders for factory goods.
Given this situation, it would be ideal to invest in four stocks from the manufacturing sector — Caterpillar Inc. (CAT - Free Report) , Zebra Technologies Corporation (ZBRA - Free Report) , Applied Industrial Technologies, Inc. (AIT - Free Report) and Helios Technologies, Inc. (HLIO - Free Report) — that we have detailed below.
Factory Orders Jump
Factory orders rose 0.1% sequentially in August after jumping a revised 0.8% in the prior month, the Commerce Department said last week. The increase came in line with analysts’ expectations. Year over year, factory orders climbed 6.8% in August.
New orders in August were primarily driven by robust demand for electrical equipment and appliances, which jumped 1.1%. Orders ???for motor vehicle ???bodies, parts ???and trailers also climbed 0.8%.
New orders for machinery rose 1.1%, while computers and electronic products orders remained unchanged. However, computers and electronic products orders rose a robust 14.7% on a year-over-year basis in August.
Rapid expansion of AI infrastructure is also driving overall manufacturing activity. Businesses are rebuilding inventories to keep pace with solid domestic demand for factory goods.
Orders for non-defense capital goods excluding aircraft, a key gauge of planned business investment in equipment, advanced a solid 1.6% in August, unchanged from the previous month. Shipments of core capital goods climbed 0.5%.
Higher oil prices owing to the war between the United States and Iran have been weighing on several sectors, including manufacturing. Diesel prices are at a record high, posing a challenge for manufacturers. Also, higher tariffs have resulted in increased costs of goods.
Despite these headwinds, robust demand continued to propel manufacturing activity, which bodes well for the 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 43.6%. 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.
Zebra Technologies
Zebra Technologies Corporation is the leading provider of enterprise asset intelligence solutions in the automatic identification and data capture solutions industry throughout the world. ZBRA has a diversified portfolio of products and solutions that includes cloud-based subscriptions and a full range of services like maintenance, repair, technical support, as well as managed and professional services.
Zebra Technologies’ expected earnings growth for the current year is 28.2%. The Zacks Consensus Estimate for current-year earnings has improved 9.4% over the past 60 days. ZBRA currently sports a Zacks Rank #1.
Applied Industrial Technologies
Applied Industrial Technologies, Inc. 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 9.2%. The Zacks Consensus Estimate for current-year earnings has improved 1.4% over the past 60 days. AIT currently has a Zacks Rank #2 (Buy).
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% over the past 60 days. Currently, HLIO has a Zacks Rank #2.
View the Zacks #1 Rank List
Image: Bigstock
4 Stocks to Boost Your Portfolio on Steady Growth in Factory Orders
Key Takeaways
The U.S. manufacturing sector is making a steady recovery amid inflationary pressures. New orders for U.S. factory goods rose in August, boosted by robust demand despite higher prices.
Oil prices have surged over the past six months owing to the ongoing crisis in the Middle East. This has seen prices of raw materials jump at an alarming pace. However, demand remained high for electrical equipment and appliances as well as their components in August, which drove new orders for factory goods.
Given this situation, it would be ideal to invest in four stocks from the manufacturing sector — Caterpillar Inc. (CAT - Free Report) , Zebra Technologies Corporation (ZBRA - Free Report) , Applied Industrial Technologies, Inc. (AIT - Free Report) and Helios Technologies, Inc. (HLIO - Free Report) — that we have detailed below.
Factory Orders Jump
Factory orders rose 0.1% sequentially in August after jumping a revised 0.8% in the prior month, the Commerce Department said last week. The increase came in line with analysts’ expectations. Year over year, factory orders climbed 6.8% in August.
New orders in August were primarily driven by robust demand for electrical equipment and appliances, which jumped 1.1%. Orders ???for motor vehicle ???bodies, parts ???and trailers also climbed 0.8%.
New orders for machinery rose 1.1%, while computers and electronic products orders remained unchanged. However, computers and electronic products orders rose a robust 14.7% on a year-over-year basis in August.
Rapid expansion of AI infrastructure is also driving overall manufacturing activity. Businesses are rebuilding inventories to keep pace with solid domestic demand for factory goods.
Orders for non-defense capital goods excluding aircraft, a key gauge of planned business investment in equipment, advanced a solid 1.6% in August, unchanged from the previous month. Shipments of core capital goods climbed 0.5%.
Higher oil prices owing to the war between the United States and Iran have been weighing on several sectors, including manufacturing. Diesel prices are at a record high, posing a challenge for manufacturers. Also, higher tariffs have resulted in increased costs of goods.
Despite these headwinds, robust demand continued to propel manufacturing activity, which bodes well for the 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 43.6%. 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.
Zebra Technologies
Zebra Technologies Corporation is the leading provider of enterprise asset intelligence solutions in the automatic identification and data capture solutions industry throughout the world. ZBRA has a diversified portfolio of products and solutions that includes cloud-based subscriptions and a full range of services like maintenance, repair, technical support, as well as managed and professional services.
Zebra Technologies’ expected earnings growth for the current year is 28.2%. The Zacks Consensus Estimate for current-year earnings has improved 9.4% over the past 60 days. ZBRA currently sports a Zacks Rank #1.
Applied Industrial Technologies
Applied Industrial Technologies, Inc. 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 9.2%. The Zacks Consensus Estimate for current-year earnings has improved 1.4% over the past 60 days. AIT currently has a Zacks Rank #2 (Buy).
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% over the past 60 days. Currently, HLIO has a Zacks Rank #2.