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The Zacks Analyst Blog Highlights: Caterpillar, Deere & Co, Dover Corp, Graco and Applied Industrial Technologies

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For Immediate Release

Chicago, IL – May 6, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Caterpillar Inc. CAT, Deere & Company DE, Dover Corporation DOV, Graco Inc. GGG and Applied Industrial Technologies, Inc. AIT.

Here are highlights from Wednesday’s Analyst Blog:

U.S. Manufacturing Continues to Expand: 5 Winners

Manufacturing activity in the United States grew at a strong pace once again in April. The manufacturing sector has been performing well ever since the economy reopened following the COVID-induced lockdown.

One of the major reasons behind the robust performance by the sector is that people are spending a lot more on goods compared to services following the pandemic, as a result of which they are shelling out more on goods.

Manufacturing Sector on a High

According to an ISM report released on May 3, manufacturing activity expanded showing a reading of 60.7. Although the growth came in lower than expectations, and below the 37-year high achieved in March, manufacturing activity has now increased for the 11th consecutive month.

Manufacturing activity had contracted in March, April and May 2020 due to the pandemic. The ISM PMI has remained above 50 since June 2020 when the economy started reopening. Anything above 50% indicates expansion in manufacturing activities.

Both the New Orders Index and the Production Index edged lower but the sector has been on the growth track. The New Orders Index decreased to 64.3% from March's reading of 68 %, while the Production Index came up with a reading of 62.5%, declining 5.6% from the prior month.

Manufacturing Activity Poised to Grow

Manufacturing activity has been on the rise ever since the economy reopened and started this year on a high following the coronavirus vaccine rollout. At the same time, new COVID-19 cases and deaths have been on the decline over the past couple of months.

As more people start getting vaccinated they will feel confident, and further help the manufacturing sector. Moreover, the new round of coronavirus stimulus checks have started reaching millions, which has led them to spending more. It is thus likely that with more spending power, new orders for goods will rise in the coming months.

This comes almost as an assurance given that both consumer confidence and consumer spending increased in April. Also, the Fed recently took the decision not to change the interest rate, which is as low as 0-0.25%. This will continue to significantly reduce expenditure on capital goods, and simultaneously make U.S. currency cheaper and its manufactured products more competitive in the international market.

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 good returns. You can see the complete list of today's Zacks #1 Rank stocks here.

Caterpillar is the largest global manufacturer of construction and mining equipment. Given that it serves a gamut of sectors — infrastructure, construction, mining, oil & gas and transportation — the company is considered a bellwether of the global economy.

The company's expected earnings growth rate for the current year is 35.2%. The Zacks Consensus Estimate for current-year earnings has improved 10.5% over the past 60 days. The company has a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Deere & Co. is the world's largest producer of agricultural equipment, manufacturing agricultural machinery since 1837 under the iconic John Deere brand.

The company's expected earnings growth rate for the current year is 84.2%. The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the past 60 days. The company has a Zacks Rank #2 (Buy).

Dover Corp. is an industrial conglomerate producing a wide range of specialized industrial products and manufacturing equipment.

The company's expected earnings growth rate for the current year is 21.9%. The Zacks Consensus Estimate for current-year earnings has improved 7.1% over the past 60 days. The company has a Zacks Rank #2.

Graco manufactures, designs and sells equipment and systems used to measure, move, control, spray and dispense fluid as well as powder materials. 

The company's expected earnings growth rate for the current year is 27.7%. The Zacks Consensus Estimate for current-year earnings has improved 6.4% over the past 60 days. The company has a Zacks Rank #2.

Applied Industrial Technologies is a distributor of value-added industrial products — including engineered fluid power components, bearings, specialty flow control solutions, power transmission products and miscellaneous industrial supplies.

The company's expected earnings growth rate for the current year is 2.9%. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the past 60 days. The company has a Zacks Rank #2 (Buy).

Infrastructure Stock Boom to Sweep America

A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It's bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.

The only question is "Will you get into the right stocks early when their growth potential is greatest?"

Zacks has released a Special Report to help you do just that, and today it's free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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