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3 Manufacturing Stocks to Buy Despite Trade War Concerns
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Economic activity in the manufacturing sector expanded last month, according to the Institute for Supply Management, despite growing trade war concerns between the U.S. and China. This means that investors might want to jump into manufacturing stocks. So we are going to take a look at three manufacturing industry stocks that look like strong buys right now.
The manufacturing sector expanded in July as the overall economy expanded for the 111th consecutive month, according to U.S. supply executives. ISM’s monthly report for July noted that the PMI did fall by 2.1% to hit 58.1%. But, any figure above 50 indicates that the bulk of the manufacturing industry is gaining strength. “Demand remains strong, with the New Orders Index at 60 percent or above for the 15th straight month, and the Customers’ Inventories Index remaining low,” ISM chair Timothy Fiore said in a statement.
Plus, 17 out of the 18 manufacturing industries reported growth in July. Investors should also note that the PMI hovered below its 12-month average of 59.1, but rested well above the year-long low of 57.3.
Now, let’s dive right into some manufacturing industry stocks that investors might want to buy at the moment.
Caterpillar posted impressive second-quarter financial results and upped its full-year guidance. Still, shares of CAT have sunk over 16% in the last six months on the back of growing trade war concerns between the world’s two largest economies. This, however, has made Caterpillar stock appear rather cheap at the moment. CAT is currently trading at 11.3X forward 12-month Zacks Consensus EPS estimates, which marks a discount compared to its industry’s 15.5X average. More importantly, Caterpillar is currently trading near its three-year low.
Looking ahead, our current Zacks Consensus Estimate is calling for Caterpillar’s full-year revenues to surge by over 19.6% to reach $54.38 billion. Meanwhile, CAT’s adjusted fiscal year earnings are expected to reach $11.54 per share, which would mark nearly 68% expansion.
The company has also received 10 full-year and 10 fiscal 2019 upward earnings estimate revisions over the last 30 days, against zero downward changes. CAT’s positive earnings revision activity helps land it a Zacks Rank #1 (Strong Buy)—Caterpillar also sports an “A” grade for Momentum and a “B” for Value in our Style Scores system.
Zebra Technologies, which builds tracking technology, printers, RFID scanners, mobile computers and tablets, real-time locating systems, and more, is a strong choice for investors. The firm boasts over 10,000 partners across 100 countries and saw its fiscal 2017 sales reach $3.72 billion. Shares of ZBRA have surged over 145% in the last two years and currently rest just below their 52-week high after a strong Q2 performance. And the company looks poised to continue to expand.
Zebra is projected to see its third-quarter earnings jump by 13.5% to hit $1.06 billion. Meanwhile, its full-year revenues are expected to climb 11.3% to $4.14 billion. More impressively, ZBRA’s adjusted earnings are projected to soar nearly 47% to $10.36 per share, while its Q3 earnings are expected to jump by 40%.
Zebra is currently a Zacks Rank #1 (Strong Buy) having seen six upward earnings estimates revisions for Q3, fiscal 2018, and fiscal 2019, with 100% agreement to the upside, all over the last 30 days. ZBRA has also topped our earnings estimates for nine straight quarters.
Colfax Corporation
Colfax provides air and gas handling and fabrication technology products and services to customers under the Howden and ESAB brands. The company is currently a Zacks Rank #1 (Strong Buy) that sports a “B” grade for value. CFX earned its rank on the back of impressive earnings estimate revisions trends. Over the last 30 days, Colfax has received 10 upward earnings estimate revisions for both its current year and fiscal 2019, against zero downward changes.
The Fulton, Maryland-headquartered firm has also seen its stock price climb over 11% during the last month. Colfax is projected to see its third-quarter earnings jump by nearly 24% and its full-year EPS figure surge 29% to hit $2.25 per share. Lastly, shares of CFX currently sit roughly $10 below their 52-week high of $43.29 per share, which means it has plenty of room to climb before it has to break into a new range.
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3 Manufacturing Stocks to Buy Despite Trade War Concerns
Economic activity in the manufacturing sector expanded last month, according to the Institute for Supply Management, despite growing trade war concerns between the U.S. and China. This means that investors might want to jump into manufacturing stocks. So we are going to take a look at three manufacturing industry stocks that look like strong buys right now.
The manufacturing sector expanded in July as the overall economy expanded for the 111th consecutive month, according to U.S. supply executives. ISM’s monthly report for July noted that the PMI did fall by 2.1% to hit 58.1%. But, any figure above 50 indicates that the bulk of the manufacturing industry is gaining strength. “Demand remains strong, with the New Orders Index at 60 percent or above for the 15th straight month, and the Customers’ Inventories Index remaining low,” ISM chair Timothy Fiore said in a statement.
Plus, 17 out of the 18 manufacturing industries reported growth in July. Investors should also note that the PMI hovered below its 12-month average of 59.1, but rested well above the year-long low of 57.3.
Now, let’s dive right into some manufacturing industry stocks that investors might want to buy at the moment.
Caterpillar (CAT - Free Report)
Caterpillar posted impressive second-quarter financial results and upped its full-year guidance. Still, shares of CAT have sunk over 16% in the last six months on the back of growing trade war concerns between the world’s two largest economies. This, however, has made Caterpillar stock appear rather cheap at the moment. CAT is currently trading at 11.3X forward 12-month Zacks Consensus EPS estimates, which marks a discount compared to its industry’s 15.5X average. More importantly, Caterpillar is currently trading near its three-year low.
Looking ahead, our current Zacks Consensus Estimate is calling for Caterpillar’s full-year revenues to surge by over 19.6% to reach $54.38 billion. Meanwhile, CAT’s adjusted fiscal year earnings are expected to reach $11.54 per share, which would mark nearly 68% expansion.
The company has also received 10 full-year and 10 fiscal 2019 upward earnings estimate revisions over the last 30 days, against zero downward changes. CAT’s positive earnings revision activity helps land it a Zacks Rank #1 (Strong Buy)—Caterpillar also sports an “A” grade for Momentum and a “B” for Value in our Style Scores system.
Zebra Technologies Corporation (ZBRA - Free Report)
Zebra Technologies, which builds tracking technology, printers, RFID scanners, mobile computers and tablets, real-time locating systems, and more, is a strong choice for investors. The firm boasts over 10,000 partners across 100 countries and saw its fiscal 2017 sales reach $3.72 billion. Shares of ZBRA have surged over 145% in the last two years and currently rest just below their 52-week high after a strong Q2 performance. And the company looks poised to continue to expand.
Zebra is projected to see its third-quarter earnings jump by 13.5% to hit $1.06 billion. Meanwhile, its full-year revenues are expected to climb 11.3% to $4.14 billion. More impressively, ZBRA’s adjusted earnings are projected to soar nearly 47% to $10.36 per share, while its Q3 earnings are expected to jump by 40%.
Zebra is currently a Zacks Rank #1 (Strong Buy) having seen six upward earnings estimates revisions for Q3, fiscal 2018, and fiscal 2019, with 100% agreement to the upside, all over the last 30 days. ZBRA has also topped our earnings estimates for nine straight quarters.
Colfax Corporation
Colfax provides air and gas handling and fabrication technology products and services to customers under the Howden and ESAB brands. The company is currently a Zacks Rank #1 (Strong Buy) that sports a “B” grade for value. CFX earned its rank on the back of impressive earnings estimate revisions trends. Over the last 30 days, Colfax has received 10 upward earnings estimate revisions for both its current year and fiscal 2019, against zero downward changes.
The Fulton, Maryland-headquartered firm has also seen its stock price climb over 11% during the last month. Colfax is projected to see its third-quarter earnings jump by nearly 24% and its full-year EPS figure surge 29% to hit $2.25 per share. Lastly, shares of CFX currently sit roughly $10 below their 52-week high of $43.29 per share, which means it has plenty of room to climb before it has to break into a new range.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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