The Zacks Analyst Blog Highlights A. O. Smith, Parker-Hannifin, Lakeland Industries and AZZ
For Immediate Release
Chicago, IL – January 18, 2024 – 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: A. O. Smith Corp. AOS, Parker-Hannifin Corp. PH, Lakeland Industries, Inc. LAKE and AZZ Inc. AZZ.
Here are highlights from Wednesday’s Analyst Blog:
4 Stocks to Buy as Manufacturing Activity Makes Steady Progress
The crisis for the U.S. manufacturing sector is far from over but the picture is finally looking brighter as activity shows signs of expansion. Manufacturing activity contracted in 2023, but the pace slowed as the year came to a close.
The Institute for Supply Management’s (ISM) manufacturing PMI rose to 47.4 in December after remaining unchanged in the prior two months at 46.7. Also, December’s growth in manufacturing activity came in higher than economists’ expectations of 47.1.
Although any reading below 50 indicates contraction, the upward movement in December is being seen as a sign of recovery. The expansion in manufacturing activity in December came as inflation cooled and price pressures eased, which gave a boost to demand.
Although data shows that expansion in manufacturing activity, which accounts for 10.3% of the economy, is making slow progress, orders for durable goods have been steadily climbing. Orders for long-lasting, U.S.-made goods jumped a solid 5.4% in November, easily beating the consensus estimate of a rise of 2.2%.
Durable goods orders increased 4.5% year over year in November. Also, U.S. GDP has been expanding steadily, which bodes well for the manufacturing sector. Notably, GDP grew a solid 4.9% in the third quarter of 2023.
Easing inflation has also seen the Federal Reserve finally hinting at ending its monetary tightening campaign. Markets are now pricing in three 25-basis point rate cuts in 2024, which will further ease price pressures. Lower borrowing costs will aid in driving orders at U.S. factories, which will boost manufacturing activity in the near term.
Our Choices
Given this scenario, it would be ideal to invest in five stocks such as A. O. Smith Corp., Parker-Hannifin Corp., Lakeland Industries, Inc. and AZZ Inc., which we have detailed below. 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.
A. O. Smith Corporation is one of the leading manufacturers of commercial and residential water heating equipment and water treatment products in 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 20.4%. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 60 days. AOS currently carries a Zacks Rank #2.
Parker-Hannifin Corporation is a global diversified manufacturer of motion & control technologies and systems. PH provides precision-engineered solutions for a wide variety of mobile, industrial and aerospace markets.
Parker-Hannifin’s expected earnings growth for the current year is 7.8%. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last 60 days. PH presently has a Zacks Rank #2.
Lakeland Industries, Inc. has five divisions and three wholly-owned subsidiaries: one large division of LAKE manufactures disposable/limited-use garments and the four smaller divisions. These are Chemland, which manufactures suits for toxic waste clean-up teams, Fireland Fyrepel Products, which manufactures fire and heat protective apparel and protective systems for personnel, Highland, which manufactures specialty safety and industrial work gloves and Uniland, which manufactures industrial and medical woven cloth garments.
Lakeland Industries’ expected earnings growth for the current year is 128%. The Zacks Consensus Estimate for current-year earnings has improved 8.6% over the last 60 days. LAKE currently sports a Zacks Rank #1.
AZZ Inc. is a global provider of metal coating services, welding solutions, specialty electrical equipment and highly engineered services to the markets of power generation, transmission, distribution and industrial in protecting metal and electrical systems used to build and enhance the world's infrastructure.
AZZ Inc.’s expected earnings growth for the current year is 20.4%. The Zacks Consensus Estimate for current-year earnings has improved 2.2% over the past 60 days. AZZ at present sports a Zacks Rank #1.
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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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