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5 Stocks to Buy on Robust Show by Manufacturing Sector

Ritujay Ghosh
·5 min read

The U.S. manufacturing sector, which has been putting up a great show over the past few months, expanded yet again in the month of October. In fact, manufacturing grew for at the fastest pace in almost two years, reflecting an overall expansion of the economy, according to the Institute for Supply Management (ISM). One of the major reasons behind this is that people are spending a lot more on goods than services following the pandemic, as the remote work-and-learn culture has made them shell out more on goods.

Manufacturing Sector Making Steady Recovery

According to the ISM report released on Nov 2, October Manufacturing PMI advanced to 59.3%, adding 3.9% to its September reading. This is also the highest reading since September 2018 and the sixth consecutive month of overall economic growth.

Besides, the New Orders Index increased 7.7% from September to 67.9%. Other sub-indexes like Production Index was at 63%, jumping 2% from September’s reading. Among the 18 major manufacturing industries, 15 witnessed massive growth while textile mills, and printing & related support activities remained the laggards.

Economy Shows Signs of Recovery

The robust growth in manufacturing is likely to aid the economy. Also, the economy is gradually trying to stand back on its feet, with the GDP growing a historic 33.1% in the third quarter. Moreover fresh orders for manufactured goods too have increased, according to a report from the Census Bureau released on Nov 3. The report shows that new orders for manufactured goods increased 1.1% in September for the fifth consecutive month in a row. This follows an increase of 0.6% in August. This once again shows the strength in the economy supported by the manufacturing sector.

Our Choices

Given this scenario, it is ideal to invest in these five stocks. All these stocks have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and assure you good returns. You can see the complete list of today’s Zacks #1 Rank stocks here.

Franklin Electric Co., Inc. FELE is a global leader in the production and marketing of systems and components for the movement of water and automotive fuels. Franklin Electric has produced high-quality industrial pumps, filters and accessories. 

The company’s expected earnings growth rate for the current year is 2.4%. The Zacks Consensus Estimate for current-year earnings has improved 15.2% over the past 60 days. Franklin Electric sports a Zacks Rank #1.

Standex International Corporation SXI is a diversified manufacturer producing and marketing a wide variety of useful, quality products. The company enjoys a broad and well-balanced earnings base by virtue of its strong market position in select areas of operation.

The company’s expected earnings growth rate for the current year is 14.3%. The Zacks Consensus Estimate for current-year earnings has improved 8.4% over the past 60 days. Standex International carries a Zacks Rank #1.

Pentair plc PNR delivers a comprehensive range of smart, sustainable water solutions to homes, business and industry globally. Its portfolio of solutions enables customers to access clean, safe water, reduce water consumption, as well as to recover and reuse it. 

The company’s expected earnings growth rate for the current year is 2.1%. The Zacks Consensus Estimate for current-year earnings has improved 10.5% over the past 60 days. Pentair has a Zacks Rank #2.

A. O. Smith Corporation AOS is one of the leading manufacturers of commercial and residential water heating equipment, and water treatment products of the world. The company specializes in offering innovative, and energy-efficient solutions and products, which are developed and sold on a global platform.

The company’s expected earnings growth rate for next year is 19.3%. The Zacks Consensus Estimate for current-year earnings has improved 8.8% over the past 60 days. A. O. Smith has a Zacks Rank #2.

Regal Beloit Corporation RBC is a leading manufacturer of electrical and mechanical motion control products. The company offers an array of electric motors, blowers, electric generators, transfer switches, gearboxes, power generation components and controls.

The company’s expected earnings growth rate for the current year is 1.5%. The Zacks Consensus Estimate for current-year earnings has improved 19.5% over the past 60 days. Regal Beloit holds a Zacks Rank #1.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>


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A. O. Smith Corporation (AOS) : Free Stock Analysis Report
 
Regal Beloit Corporation (RBC) : Free Stock Analysis Report
 
Franklin Electric Co., Inc. (FELE) : Free Stock Analysis Report
 
Pentair plc (PNR) : Free Stock Analysis Report
 
Standex International Corporation (SXI) : Free Stock Analysis Report
 
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