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The Zacks Analyst Blog Highlights: DXP Enterprises, EnerSys, Zebra Technologies, ExOne and Twin Disc

Zacks Equity Research
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Chicago, IL – January 9, 2019 – 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: DXP Enterprises Inc. DXPE, EnerSys ENS, Zebra Technologies Corp. ZBRA, The ExOne Co. XONE and Twin Disc Inc. TWIN.  

Here are highlights from Tuesday’s Analyst Blog:

U.S. Manufacturing Sector Likely to Improve in 2019: 5 Picks

U.S. manufacturing sector has been witnessing resurgence under the Trump administration since 2017, shrugging off its lengthy spell of weak productivity and sluggish growth. Despite a volatile 2018, this sector is still expanding and generating impressive number of jobs. Manufacturers have increased capital spending and hiring driven by massive tax overhaul, deregulatory measures, strong domestic economy and business sentiment.

Notably, manufacturing sector constitutes nearly 12% of the U.S. GDP. Any positive development on the United States – China trade war front will be highly beneficial for this sector. At this stage, investment in manufacturing stocks with a favorable Zacks Rank and strong growth potential will be a prudent decision.

U.S. Manufacturing Remains Solid

On Jan 3, the Institute for Supply Management (ISM) reported that the U.S. manufacturing expanded in December 2018 for the 116th consecutive month. In the last 12 months, the average value of the manufacturing index was pegged at 58.8, reflecting strong growth in the sector. Notably, any reading above 50 indicates overall growth of the manufacturing sector.

Importantly, Customers’ Inventories Index was pegged at 41.7 in December, reflecting 27th consecutive month of low (below 50 benchmark level) customer inventory. This will act as a major catalyst for the manufacturing sector in 2019.

Strong Hiring in Manufacturing Sector

According to the Department of Labor, the manufacturing sector generated 284,000 jobs in 2018, highest since 1997. This sector generated 207,000 jobs in 2017. Within the sector, durable goods industries, which produce industrial intermediaries, generated nearly 89% of job additions.

The National Association of Manufacturers reported that about 500,000 manufacturing jobs are currently available in the United States. A recent study by the Manufacturing Institute and Deloitte has projected that by the end of 2025, the U.S. manufacturing sector will witness shortages of around 2 million skilled workers.

Positive Developments on Trade War Front

During Jan 7-8, high level delegations of both the United States and China have started dialogue in order to discuss a possible trade deal. Notably, trade related conflict between the United States and China prompted many experts to warn about a global economic slowdown in 2019.

Notably, on Dec 1, U.S. President Donald Trump and his Chinese counterpart Xi Jinping reached an initial agreement to find a permanent solution to the trade-related conflict between the two countries. The truce will be valid for the next 90 days during which the two countries will try to solve bilateral trade conflicts.

On Dec 29, President Donald Trump Tweeted that he had a "very good (telephonic) call" with Chinese President Xi Jinping regarding the lingering trade dispute between the two countries. Trump also added that progress toward a solution is “moving along very well.”

Our Picks

At present, the U.S. economy is firmly placed on growth trajectory. Strong manufacturing goods orders are normally associated with stronger economic activity.  Considering these positives, investing in manufacturing stocks with strong growth potential will be a lucrative move. We narrowed down our choice to five stocks each of which carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy).

DXP Enterprises Inc. is a leading products and service distributor that adds value and total cost savings solutions to industrial customers in the United States, Canada, Mexico and Dubai. It sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here. The company has expected earnings growth of 94.2% for current year. The Zacks Consensus Estimate for the current year has improved by 11.3% over the last 60 days.

EnerSys is the global leader in stored energy solutions for industrial applications. It sports a Zacks Rank #1. The company has expected earnings growth of 9.9% for current year. The Zacks Consensus Estimate for the current year has improved by 2.8% over the last 60 days.

Zebra Technologies Corp. designs, manufactures, and sells a range of automatic identification and data capture (AIDC) products worldwide. It carries a Zacks Rank #2. The company has expected earnings growth of 53.8% for current year. The Zacks Consensus Estimate for the current year has improved by 0.7% over the last 60 days.

The ExOne Co. provides three-dimensional printing machines and printed products to industrial customers. It carries a Zacks Rank #2. The company has expected earnings growth of 31.2% for current year. The Zacks Consensus Estimate for the current year has improved by 10.4% over the last 60 days.

Twin Disc Inc. designs, manufactures and sells heavy duty off-highway power transmission equipment. It carries a Zacks Rank #2. The company has expected earnings growth of 21% for current year. The Zacks Consensus Estimate for the current year has improved by 1.8% over the last 60 days.

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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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Twin Disc, Incorporated (TWIN) : Free Stock Analysis Report
 
DXP Enterprises, Inc. (DXPE) : Free Stock Analysis Report
 
The ExOne Company (XONE) : Free Stock Analysis Report
 
Zebra Technologies Corporation (ZBRA) : Free Stock Analysis Report
 
Enersys (ENS) : Free Stock Analysis Report
 
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