3 Industrial Stocks to Buy As Tech Dips
Shares of technology giants, from Amazon AMZN to Apple AAPL, sank on Wednesday, only one day after helping send markets to new highs.
The tech sector has thrived in 2017. It has, at times, almost single-handedly helped prop up the S&P 500 and spurred on the NASDAQ. Yet, after a solid third-quarter from some of the biggest technology companies, it seems that investors wanted to take home some of their profits. This led to a nearly industry-wide, one-day selloff on Wednesday (also read: Why Are Tech Stocks Falling Today?).
With this said, it might actually be a good time to consider companies that operate in industries that might be viewed as “old school”—even though they still rake in billions in revenue and turn massive profits.
Let’s take a look at three stocks from two of these industries—farming and manufacturing—that once drove the American economy.
Deere & Company DE
Shares of this manufacturer of agricultural and farming equipment surged to hit a new 52-week high of $149.20 per share on Wednesday. The climb is part of a yearlong rally that has seen Deere & Company’s stock price ascend 48.86%, which includes a 12.42% boost over the last 12 weeks.
Looking ahead slightly, Deere & Company’s current quarterly revenues are projected to climb 36.26% to $6.40 billion,based on our current Zacks Consensus Estimates. On top of that, the company’s EPS is expected to skyrocket 70.67% for the quarter. What’s more, Deere & Company’s cash flow growth of 25.65% crushes its industry’s 7.02% decline and helps demonstrate the company’s growing cash position.
The maker of John Deere equipment also earned a “B” grade for Value in our Style Scores system. Deere & Company is currently trading at 19.22x earnings, which marks a discount compared to the “Manufacturing – Farm Equipment” industry’s average. The company’s 1.61 P/S ratio matches the industry average and helps to further demonstrate the stock’s value.
Deere & Company is also currently a Zacks Rank #1 (Strong Buy) and boasts an overall “B” VGM score. Lastly, the company has met or topped earnings estimates every quarter since the start of 2013.
Briggs & Stratton Corporation BGG
Briggs & Stratton Corporation is currently a Zacks Rank #1 (Strong Buy) and also scores an overall “B” VGM score. Shares of Briggs & Stratton have climbed over 20% in the last 12 weeks and currently sit just below their 52-week high of $25.95 per share.
This maker of air-cooled gasoline engines for outdoor power equipment is currently trading at 16.59x earnings, which marks a substantial discount compared to its industry’s average.
Briggs & Stratton’s price to book ratio of 1.95 presents a discount against competitors such as Alamo Group ALG. The company’s P/S ratio of 0.58 helps to demonstrate that this stock offers investors great bang for their buck.
The company’s full-year revenues are projected to pop 6.54% to hit $1.9 billion, based on our current Zacks Consensus Estimates. And for the full-year, Briggs & Stratton’s earnings per share are expected to hit $1.49, which would mark a 13.99% year-over-year jump.
Caterpillar Inc. CAT
Shares of this manufacturing equipment giant have been on a torrid pace this year, having jumped 49.87% already. Caterpillar’s stock price jumped 17.49% in the last 12-weeks alone and sits just below their 52-week high of $140.44 per share.
Caterpillar’s strong upward trajectory could be poised to continue as our consensus estimates call for outstanding top and bottom line growth. The company’s fourth-quarter earnings are projected to skyrocket 103.31% and 87% for the full-year.
On top of that, Caterpillar’s Q4 sales are expected to climb 24.90% to $11.96 billion. For the full-year, our estimates are calling for CAT’s revenues to reach $44.44 billion, which would mark a 15.31% year-over-year jump.
Furthermore, within the last 60 days, Caterpillar has received eight upward earnings estimates revisions for its current quarter against no downgrades. Within this same time frame, the company has also earned 10 full-year upward revisions.
Caterpillar is currently a Zacks Rank #1 (Strong Buy). Lastly, the manufacturing equipment firm has failed to meet earnings estimates only once since the start of 2014.
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Caterpillar, Inc. (CAT) : Free Stock Analysis Report
Deere & Company (DE) : Free Stock Analysis Report
Alamo Group, Inc. (ALG) : Free Stock Analysis Report
Briggs & Stratton Corporation (BGG) : Free Stock Analysis Report
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