This Day On The Street
Continue to site
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

Sector Snap: Industrials

NEW YORK (AP) â¿¿ Industrial companies are better positioned today than they were during the recession and should be able to weather an economic downturn without posting a steep drop in profits, Oppenheimer said in a research note Tuesday.

Analyst Christopher Wiggins said that in contrast to 2008, companies now have lower inventories, improved cost structures, stronger balance sheets and better access to cash.

"It is our opinion that a re-do of the most recent recession is unlikely," Wiggins wrote. "We believe companies remain in better shape versus the prior downturn, which if anything, should support more resilient earnings versus the deep cuts to industrials in late 2008."

The latest economic data, released Tuesday, appears to support that case.

Factory output increased 0.6 percent last month, according to the Federal Reserve. That's the biggest increase since the March 11 earthquake in Japan, which disrupted supply chains and limited output by some U.S. auto plants.

The auto industry accounted for nearly all of the increase. Motor vehicles and parts jumped 5.2 percent. Excluding that category, factory output grew only 0.2 percent.

Overall industrial production jumped 0.9 percent â¿¿ the biggest increase this year. Unusually hot weather in July drove demand for energy generated by utilities. Mining output also increased.

The analyst said his top long-term picks in the sector are Idex Corp., which makes the Jaws of Life rescue equipment and other products, and Danaher Corp., which makes medical and industrial instruments. Both companies offer the best track records when it comes to tough economies and come with the least amount of risk, he said.

Wiggins also pointed to ESCO Technologies Inc., an engineered products supplier, and Tetra Tech Inc., an engineering and construction consultant for water and energy projects, as strong players in the sector.

The shares of both companies have probably taken bigger hits to their shares than is warranted, Wiggins said, because of worries about a possible decline in public and municipal spending.

1 of 2

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
Only $9.95
14-Days Free
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
SYM TRADE IT LAST %CHG

Markets

DOW 17,730.11 -27.80 -0.16%
S&P 500 2,076.78 -0.64 -0.03%
NASDAQ 5,009.2140 -3.9090 -0.08%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs