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4 Industrial Stocks to Buy as U.S. May Retail Sales Instill Hope
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The U.S Manufacturing sector seems to be showing signs of stabilization as evident from the pick-up in manufacturing activities, as factories and businesses begin to steadily resume operations. Further, solid retail sales data, increase in employment as well as government stimulus packages have instilled optimism for the U.S manufacturing sector, considering it accounts for 11% of the U.S economy.
Retail Sales Rebound, Jobs Increase
Per the U.S Commerce Department report, May retail sales rose 17.7%, after a record 16.4% decline in April, as consumers resumed spending after being affected by the pandemic. Notably, retail sales are one of the major macroeconomic indicators for gauging the economic health in the United States that includes spending on gasoline, cars, food and drinks. However, the rebound might be short-lived, if the pandemic worsens.
Furthermore, per the Labor department, non-farm payroll employment was up 2.5 million in May after registering record job losses of 20.7 million in April. The unemployment rate declined to 13.3% in May, marking an improvement from April’s record 14.7%. These improvements reflect the gradual resumption of economic activities in the nation, after being hit hard in March and April due to the coronavirus crisis.
U.S stocks rallied during yesterday’s trading session on reports of higher retail sales data and the U.K.-led steroid drug trials which showed reduction in COVID-19 death rates by up to one third for critically ill patients. Apart from this, the Fed’s announcement to buy corporate bonds in a bid to infuse liquidity and President Trump administration’s $1-trillion infrastructure plan to cushion the economy have also contributed to this rally. Yesterday, the Dow Jones Industrial Average closed at 26,346.07 points, with a 2.26% gain.
Manufacturing Activity Gradually Picking Up — A Sign of Hope
According to the Federal Reserve, industrial production inched up 1.4% in May, as most factories began resuming operations partially, after prolonged periods of pandemic-related suspensions. Industrial production suffered its sharpest drop of 11.2% in April. Manufacturing output rose 3.8% in the month after a record 13.7% fall in April, as motor vehicles and parts registered the largest gains.
Per the Institute for Supply Management, the U.S Purchasing Managers’ Index (PMI) came in at 43.1 in May, registering 1.6% growth from the April reading of 41.5%, as businesses are steadily resuming operations across most states. Although a reading below 50 denotes contraction in the sector, the sequential improvement offers some hope. The New Orders Index increased to 31.8% in May from April’s 27.1%. Production Index came in at 33.2%, up from April’s 27.5%. Employment Index was 32.1% in May, up from April’s 27.5%.
Over the past year, the Industrial Products sector has lost 2.9%, as against the S&P 500’s growth of 9.1%. The sector, which was already bearing the brunt of waning global demand and trade related concerns, has been hit hard by the coronavirus crisis. The pandemic has disrupted global supply chains, causing factory closures and production suspensions, significantly thwarting consumer demand. Nevertheless, manufacturing companies are focusing on supporting margins through cost-control actions as well as increased productivity.
Despite the prevailing weakness in the sector, we have picked four industrial stocks that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy), have positive growth estimates and delivered year-to-date positive returns. You can see the complete list of today’s Zacks #1 Rank stocks here.
4 Industrial Stocks to Bet on
Axon Enterprise, Inc. : Based in Scottsdale, AZ, this company develops, manufactures, and sells conducted energy weapons (CEWs) worldwide. It has a long-term estimated earnings growth rate of 15% and currently carries a Zacks Rank #2. The Zacks Consensus Estimate for 2020 earnings suggests 14.2% growth from the year-ago quarter. The company has a trailing four-quarter positive earnings surprise of 30.6%, on average. Its shares have climbed 27.8% so far this year.
Broadwind, Inc. (BWEN - Free Report) : Cicero, IL-based Broadwind provides products to the energy, mining, and infrastructure sector customers primarily in the United States. This Zacks #2 Ranked stock has appreciated 79.6%, year to date. The Zacks Consensus Estimate for the current-year earnings calls for a year-over-year surge of 174%. The company has a trailing four-quarter positive earnings surprise of 50%, on average.
SiteOne Landscape Supply, Inc. (SITE - Free Report) : This Roswell, GA-based company engages in the wholesale distribution of landscape supplies in the United States and Canada. It sports a Zacks Rank #1, at present. The Zacks Consensus Estimate for the ongoing-year earnings has been revised upward by 78% over the past 30 days. The consensus mark indicates an improvement of 15.4% from the year-ago quarter. The company has a trailing four-quarter positive earnings surprise of 106.7%, on average. The stock has rallied 24.1%, year to date.
TPI Composites, Inc. (TPIC - Free Report) : This Scottsdale, AZ -based company manufactures and sells composite wind blades, and related precision molding and assembly systems to original equipment manufacturers. It currently carries a Zacks Rank of 2. The Zacks Consensus Estimate for this year’s earnings moved 10% north in the past 30 days. The consensus mark indicates year-over-year growth of 17.9%. The company’s shares have gained 22.6% in the year so far.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 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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4 Industrial Stocks to Buy as U.S. May Retail Sales Instill Hope
The U.S Manufacturing sector seems to be showing signs of stabilization as evident from the pick-up in manufacturing activities, as factories and businesses begin to steadily resume operations. Further, solid retail sales data, increase in employment as well as government stimulus packages have instilled optimism for the U.S manufacturing sector, considering it accounts for 11% of the U.S economy.
Retail Sales Rebound, Jobs Increase
Per the U.S Commerce Department report, May retail sales rose 17.7%, after a record 16.4% decline in April, as consumers resumed spending after being affected by the pandemic. Notably, retail sales are one of the major macroeconomic indicators for gauging the economic health in the United States that includes spending on gasoline, cars, food and drinks. However, the rebound might be short-lived, if the pandemic worsens.
Furthermore, per the Labor department, non-farm payroll employment was up 2.5 million in May after registering record job losses of 20.7 million in April. The unemployment rate declined to 13.3% in May, marking an improvement from April’s record 14.7%. These improvements reflect the gradual resumption of economic activities in the nation, after being hit hard in March and April due to the coronavirus crisis.
U.S stocks rallied during yesterday’s trading session on reports of higher retail sales data and the U.K.-led steroid drug trials which showed reduction in COVID-19 death rates by up to one third for critically ill patients. Apart from this, the Fed’s announcement to buy corporate bonds in a bid to infuse liquidity and President Trump administration’s $1-trillion infrastructure plan to cushion the economy have also contributed to this rally. Yesterday, the Dow Jones Industrial Average closed at 26,346.07 points, with a 2.26% gain.
Manufacturing Activity Gradually Picking Up — A Sign of Hope
According to the Federal Reserve, industrial production inched up 1.4% in May, as most factories began resuming operations partially, after prolonged periods of pandemic-related suspensions. Industrial production suffered its sharpest drop of 11.2% in April. Manufacturing output rose 3.8% in the month after a record 13.7% fall in April, as motor vehicles and parts registered the largest gains.
Per the Institute for Supply Management, the U.S Purchasing Managers’ Index (PMI) came in at 43.1 in May, registering 1.6% growth from the April reading of 41.5%, as businesses are steadily resuming operations across most states. Although a reading below 50 denotes contraction in the sector, the sequential improvement offers some hope. The New Orders Index increased to 31.8% in May from April’s 27.1%. Production Index came in at 33.2%, up from April’s 27.5%. Employment Index was 32.1% in May, up from April’s 27.5%.
Over the past year, the Industrial Products sector has lost 2.9%, as against the S&P 500’s growth of 9.1%. The sector, which was already bearing the brunt of waning global demand and trade related concerns, has been hit hard by the coronavirus crisis. The pandemic has disrupted global supply chains, causing factory closures and production suspensions, significantly thwarting consumer demand. Nevertheless, manufacturing companies are focusing on supporting margins through cost-control actions as well as increased productivity.
Despite the prevailing weakness in the sector, we have picked four industrial stocks that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy), have positive growth estimates and delivered year-to-date positive returns. You can see the complete list of today’s Zacks #1 Rank stocks here.
4 Industrial Stocks to Bet on
Axon Enterprise, Inc. : Based in Scottsdale, AZ, this company develops, manufactures, and sells conducted energy weapons (CEWs) worldwide. It has a long-term estimated earnings growth rate of 15% and currently carries a Zacks Rank #2. The Zacks Consensus Estimate for 2020 earnings suggests 14.2% growth from the year-ago quarter. The company has a trailing four-quarter positive earnings surprise of 30.6%, on average. Its shares have climbed 27.8% so far this year.
Broadwind, Inc. (BWEN - Free Report) : Cicero, IL-based Broadwind provides products to the energy, mining, and infrastructure sector customers primarily in the United States. This Zacks #2 Ranked stock has appreciated 79.6%, year to date. The Zacks Consensus Estimate for the current-year earnings calls for a year-over-year surge of 174%. The company has a trailing four-quarter positive earnings surprise of 50%, on average.
SiteOne Landscape Supply, Inc. (SITE - Free Report) : This Roswell, GA-based company engages in the wholesale distribution of landscape supplies in the United States and Canada. It sports a Zacks Rank #1, at present. The Zacks Consensus Estimate for the ongoing-year earnings has been revised upward by 78% over the past 30 days. The consensus mark indicates an improvement of 15.4% from the year-ago quarter. The company has a trailing four-quarter positive earnings surprise of 106.7%, on average. The stock has rallied 24.1%, year to date.
TPI Composites, Inc. (TPIC - Free Report) : This Scottsdale, AZ -based company manufactures and sells composite wind blades, and related precision molding and assembly systems to original equipment manufacturers. It currently carries a Zacks Rank of 2. The Zacks Consensus Estimate for this year’s earnings moved 10% north in the past 30 days. The consensus mark indicates year-over-year growth of 17.9%. The company’s shares have gained 22.6% in the year so far.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 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.
See Zacks' 3 Best Stocks to Play This Trend >>