This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Goldman's 6 Best Industrial Stocks for 2011

BOSTON ( TheStreet) -- The average industrial stock in the S&P 500 has gained 38% in 12 months, more than twice the rise of the broader market. Industrial stocks are still favored by analysts, ranking third of 11 industry groups, because appetite for resources and infrastructure in emerging markets is amplifying demand. Goldman Sachs named the following six industrial stocks to its 2011 Conviction Buy List, with one as a short recommendation. Below, they are ordered by predicted return, from plenty to most.

6. Dover (DOV - Get Report) manufactures industrial equipment, including winches, demolition machinery attachments, hydraulic parts and powertrain systems.

As Goldman notes, Dover is no longer a contrarian story. Its stock has surged 61% in 12 months and delivered annualized gains of 17% over a three-year span. It is an analyst favorite, receiving nine "buy" recommendations and three "hold" calls. No researchers advise selling its stock. Dover yields 1.7%. The dividend has grown 12% and 10%, annually, over three- and five-year spans.

Despite the solid run over the past year, Dover's stock is comparatively inexpensive, selling for 14-times forward earnings, 2.7-times book value and 13-times cash flow, 25%, 30% and 18% machinery-industry discounts. Goldman expects the stock to advance 13% in the next 12 months to $75. Dover's fourth-quarter adjusted earnings increased 59% to 94 cents, beating analysts' consensus forecast by 15%. Dover's sales exceeded the consensus target by 6.8%. In reaction, Goldman boosted its 2011 earnings estimate to $4.30 and its 2012 earnings target to $4.60.

Bears are concerned about Dover's electronic technology segment, which sells products ranging from specialty audio components to microwave filters. But, management boosted its guidance for the segment in 2011. Goldman is optimistic about "structural change directed by new management in the areas of cost management and capital allocation." Dover's quarterly operating margin rose from 12% to 14%. Also, Dover offers "late-cycle exposure to oil and gas." The fluid management division sells components to exploration, production, distribution and refinery companies.

1 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
CMI $136.78 0.00%
CBI $48.10 0.00%
DOV $69.50 0.00%
ETN $66.67 0.00%
GS $187.24 0.00%

Markets

DOW 17,678.23 -40.31 -0.23%
S&P 500 2,056.15 -4.90 -0.24%
NASDAQ 4,863.3620 -13.1570 -0.27%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs