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4 Solid Stocks to Buy on a Rebound in March Factory Orders
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The manufacturing sector has been severely hit over the past few months as rising prices have been slowing orders. However, the sector seems to be putting up a brave fight amid the growing recession worries. According to the latest report from the Commerce Department, factory orders rose in March, showing signs of a rebound as inflation eased slightly.
The new report came days after data showed a surprise jump in orders for durable goods made in U.S. factories. With signs of inflation easing, the manufacturing sector might get a further boost in the near term. Given this scenario, stocks like Hubbell Incorporated (HUBB - Free Report) , ABB Ltd , A. O. Smith Corporation (AOS - Free Report) and Pioneer Power Solutions, Inc. (PPSI - Free Report) are expected to benefit in the coming months.
Factory Orders Rebound
The Commerce Department said on May 2 that new orders for U.S.-made factory goods rose 0.9% in March after declining 1.1% in February. This was also above the consensus estimate of a rise of 0.8%.
On a year-over-year basis, new orders rose 2.4% in March. March’s rebound in new orders was driven by a solid jump in orders for transportation equipment. New orders for transportation equipment climbed 9% in March after declining 3.2% in February.
Orders for civilian aircraft soared 78.3% in March. Orders for machinery declined 0.3%. However, new orders for electrical equipment, appliances and components gained 0.8%. Orders for computers and electronic products also rose an impressive 2.1% in March.
The report comes just days after the Census Bureau reported that durable goods orders jumped 3.2% or $8.6 billion in March after declining 1.2% in February and surpassing estimates of 0.8%.
Excluding defense, orders for new goods rose 3.5% in March. The jump in March orders was driven by transportation equipment. Orders for transportation equipment also bounced back in March after two straight months of declines. Transportation equipment orders jumped $8.1 billion or 9.1% to $97.4 billion.
Although new orders for factory goods made in the United States rebounded in March, the manufacturing sector has been struggling over the past few quarters. Higher prices have resulted in a jump in raw material costs. At the same time, people are spending cautiously and trying to save more.
However, demand is still high, which is driving orders. The rise in orders also saw industrial production increasing 0.4% in March, beating estimates of 0.2%. Year over year, industrial production rose 0.5% in March.
Moreover, despite being at multi-decade highs, inflation has been lately showing signs of easing. The Commerce Department said last week that personal consumption expenditure (PCE) rose 0.1% month over month in March. On a year-over-year basis, PCE increased 4.2%, which was down sharply from February’s rise of 5.1%.
With inflation easing, the manufacturing sector will likely get a boost from higher orders for U.S.-made factory goods, which is expected to drive production.
Our Choices
Given this scenario, it will be prudent to invest in stocks with a favorable Zacks Rank that are poised to gain from the rise in orders for factory goods. We narrowed down our search to four such stocks. Each of these stocks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Hubbell Incorporated is engaged in the design, manufacture and sale of electrical and electronic products to commercial, industrial, utility and telecommunications markets. HUBB’s products include plugs, receptacles, connectors, lighting fixtures, high voltage test and measurement equipment, and voice and data signal processing components.
Hubbell Incorporated’s expected earnings growth for the current year is 22.9%. The Zacks Consensus Estimate for current-year earnings has improved 15.8% over the last 60 days. HUBB sports a Zacks Rank #1.
ABB Ltd is a leading technology company. ABB’s products and services can be used in automated manufacturing, providing digital solutions, electrification of industry and transport, and enhancing productivity. ABB Ltd operates in five geographical regions: Europe, the Americas, Asia, the Middle East and Africa.
ABB Ltd’s expected earnings growth for the current year is 22.7%. The Zacks Consensus Estimate for current-year earnings has improved 3.2% over the last 60 days. ABB carries a Zacks Rank #2.
A. O. Smith Corporation is one of the leading manufacturers of commercial and residential water heating equipment and water treatment products of the world. AOS specializes in offering innovative, and energy-efficient solutions and products, which are developed and sold on a global platform.
A. O. Smith’s expected earnings growth for the current year is 15.9%. The Zacks Consensus Estimate for current-year earnings has improved 3.3% over the last 60 days. AOS presently has a Zacks Rank #2.
Pioneer Power Solutions, Inc. is a specialty manufacturer of electrical transmission and distribution equipment. PPSI provides solutions in the utility, industrial and commercial segments of the electrical transmission and distribution industry. Pioneer Power Solutions operates primarily in the United States, Canada and Mexico.
Pioneer Power Solutions’ expected earnings growth for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the last 60 days. PPSI currently carries a Zacks Rank #1.
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4 Solid Stocks to Buy on a Rebound in March Factory Orders
The manufacturing sector has been severely hit over the past few months as rising prices have been slowing orders. However, the sector seems to be putting up a brave fight amid the growing recession worries. According to the latest report from the Commerce Department, factory orders rose in March, showing signs of a rebound as inflation eased slightly.
The new report came days after data showed a surprise jump in orders for durable goods made in U.S. factories. With signs of inflation easing, the manufacturing sector might get a further boost in the near term. Given this scenario, stocks like Hubbell Incorporated (HUBB - Free Report) , ABB Ltd , A. O. Smith Corporation (AOS - Free Report) and Pioneer Power Solutions, Inc. (PPSI - Free Report) are expected to benefit in the coming months.
Factory Orders Rebound
The Commerce Department said on May 2 that new orders for U.S.-made factory goods rose 0.9% in March after declining 1.1% in February. This was also above the consensus estimate of a rise of 0.8%.
On a year-over-year basis, new orders rose 2.4% in March. March’s rebound in new orders was driven by a solid jump in orders for transportation equipment. New orders for transportation equipment climbed 9% in March after declining 3.2% in February.
Orders for civilian aircraft soared 78.3% in March. Orders for machinery declined 0.3%. However, new orders for electrical equipment, appliances and components gained 0.8%. Orders for computers and electronic products also rose an impressive 2.1% in March.
The report comes just days after the Census Bureau reported that durable goods orders jumped 3.2% or $8.6 billion in March after declining 1.2% in February and surpassing estimates of 0.8%.
Excluding defense, orders for new goods rose 3.5% in March. The jump in March orders was driven by transportation equipment. Orders for transportation equipment also bounced back in March after two straight months of declines. Transportation equipment orders jumped $8.1 billion or 9.1% to $97.4 billion.
Although new orders for factory goods made in the United States rebounded in March, the manufacturing sector has been struggling over the past few quarters. Higher prices have resulted in a jump in raw material costs. At the same time, people are spending cautiously and trying to save more.
However, demand is still high, which is driving orders. The rise in orders also saw industrial production increasing 0.4% in March, beating estimates of 0.2%. Year over year, industrial production rose 0.5% in March.
Moreover, despite being at multi-decade highs, inflation has been lately showing signs of easing. The Commerce Department said last week that personal consumption expenditure (PCE) rose 0.1% month over month in March. On a year-over-year basis, PCE increased 4.2%, which was down sharply from February’s rise of 5.1%.
With inflation easing, the manufacturing sector will likely get a boost from higher orders for U.S.-made factory goods, which is expected to drive production.
Our Choices
Given this scenario, it will be prudent to invest in stocks with a favorable Zacks Rank that are poised to gain from the rise in orders for factory goods. We narrowed down our search to four such stocks. Each of these stocks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Hubbell Incorporated is engaged in the design, manufacture and sale of electrical and electronic products to commercial, industrial, utility and telecommunications markets. HUBB’s products include plugs, receptacles, connectors, lighting fixtures, high voltage test and measurement equipment, and voice and data signal processing components.
Hubbell Incorporated’s expected earnings growth for the current year is 22.9%. The Zacks Consensus Estimate for current-year earnings has improved 15.8% over the last 60 days. HUBB sports a Zacks Rank #1.
ABB Ltd is a leading technology company. ABB’s products and services can be used in automated manufacturing, providing digital solutions, electrification of industry and transport, and enhancing productivity. ABB Ltd operates in five geographical regions: Europe, the Americas, Asia, the Middle East and Africa.
ABB Ltd’s expected earnings growth for the current year is 22.7%. The Zacks Consensus Estimate for current-year earnings has improved 3.2% over the last 60 days. ABB carries a Zacks Rank #2.
A. O. Smith Corporation is one of the leading manufacturers of commercial and residential water heating equipment and water treatment products of the world. AOS specializes in offering innovative, and energy-efficient solutions and products, which are developed and sold on a global platform.
A. O. Smith’s expected earnings growth for the current year is 15.9%. The Zacks Consensus Estimate for current-year earnings has improved 3.3% over the last 60 days. AOS presently has a Zacks Rank #2.
Pioneer Power Solutions, Inc. is a specialty manufacturer of electrical transmission and distribution equipment. PPSI provides solutions in the utility, industrial and commercial segments of the electrical transmission and distribution industry. Pioneer Power Solutions operates primarily in the United States, Canada and Mexico.
Pioneer Power Solutions’ expected earnings growth for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the last 60 days. PPSI currently carries a Zacks Rank #1.