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The Zacks Analyst Blog Highlights: Tetra Tech, Cintas, Casella Waste Systems, MKS Instruments and ESCO Technologies

Zacks Equity Research

For Immediate Release

Chicago, IL –October 21, 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: Tetra Tech Inc. TTEK, Cintas Corp. CTAS, Casella Waste Systems Inc. CWST, MKS Instruments Inc. MKSI and ESCO Technologies Inc. ESE.

Here are highlights from Friday’s Analyst Blog:

5 Industrial Stocks Flying High Amid Slowdown Expectation

The U.S. economy has been reeling under trade-related jitters, especially with its largest trading partner China, for the last 15 months. The lingering tariff war has resulted in a slow pace of U.S. GDP growth. Besides technology, the industrial sector has also borne the brunt of trade war owing to higher input costs and lower export demand. Both are the direct results of a prolonging trade conflict.

Industrial Production Declines in September

On Oct 17, the Department of Commerce reported that U.S. industrial production including manufacturing, mining and utilities, declined 0.4% in September, which is more than the consensus estimate of a drop of 0.2%. U.S. factory output shrank 0.5% last month. Notably, the revised estimate for the month of August rose to growth of 0.8% from 0.6% reported earlier.

On Oct 15, the Federal Reserve reported that U.S. manufacturing activities plunged 0.9% year over year mainly owing to trade war with China. Moreover, capacity utilization in the industrial sector fell to 77.5% in September from 77.9% in August. The figure was also below the consensus estimate of 77.7%.

Notably, on Oct 1, the Institute of Supply Management reported that U.S. manufacturing PMI for the month of September came in at 47.8 compared with the consensus estimate of 50.2. Any reading below 50 is recognized at a contraction in the manufacturing sector. The ISM manufacturing index for August was 49.1%. Two consecutive months of contraction is generally recognized as a recession in manufacturing, which constitutes around 12% of U.S. GDP.

Uncertainty on Trade War Front

Trade-related conflict with China continues despite President Trump’s assurance about substantial progress of a partial deal. On Oct 11, President Trump said that the largest two trading countries of the world have reached an agreement for the first part of the broader trade deal. However, on Oct 14, Bloomberg reported that China needs more discussions with the United States before signing a partial trade deal.  

The Wall Street Journal reported that China wants U.S. tariffs to be rolled back before increasing imports of U.S. agricultural products. Further, diplomatic relations may aggravate between the two countries owing to political unrest in Hong Kong.

5 Industrial Stocks Flying High

Despite several headwinds, industrial stocks have performed quite strongly so far this year. The Industrial Select Sector SPDR (XLI), one of the 11 broad sectors of the S&P 500 Index, has rallied 20.5% year to date, higher than the benchmark index’s gain of 19.6%.

In line with this impressive trend, we have narrowed down our search to five industrial stocks that skyrocketed in 2019 and still have upside left. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.

Tetra Tech Inc.is a leading global provider of consulting, construction management, engineering, program management and technical services. It operates through Government Services Group and Commercial/International Services Group segments.

The company has an expected earnings growth rate of 18.6% for the current year. The Zacks Consensus Estimate for the current year has improved by 1% over the last 30 days. The stock has jumped 67.7% year to date.

Cintas Corp.provides corporate identity uniforms and related business services primarily in North America, Latin America, Europe, and Asia. It operates through Uniform Rental and Facility Services and First Aid and Safety Services segments.

The company has an expected earnings growth rate of 12.8% for the current year. The Zacks Consensus Estimate for the current year has improved by 1.8% over the last 30 days. The stock has jumped 59.7% year to date.

Casella Waste Systems Inc.is a regional, integrated solid waste services company that provides collection, transfer, disposal and recycling services, generates steam and manufactures finished products utilizing recyclable materials primarily throughout the eastern portion of the United States and parts of Canada.

The company has an expected earnings growth rate of 36.1% for the current year. The Zacks Consensus Estimate for the current year has improved by 1% over the last 30 days. The stock has soared 51% year to date.

MKS Instruments Inc.is a global provider of instruments, subsystems and process control solutions that measure, monitor, deliver, analyze, power and control critical parameters of advanced manufacturing processes.

The company has an expected earnings growth rate of 48.2% for the next year. The Zacks Consensus Estimate for the current year has improved by 0.2% over the last 30 days. The stock has soared 46.5% year to date.

ESCO Technologies Inc.produces and supplies engineered products and systems for utility, industrial, aerospace, and commercial users worldwide. It operates in four segments: Filtration/Fluid Flow (Filtration), RF Shielding and Test (Test), Utility Solutions Group (USG), and Technical Packaging.

The company has an expected earnings growth rate of 11.9% for the next year. The Zacks Consensus Estimate for the current year has improved by 0.7% over the last 30 days. The stock has surged 24.3% year to date.

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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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