PCP, ITW And CAT, Pushing Industrial Goods Sector Downward

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model

All three major indices are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 3 points (0.0%) at 15,304 as of Thursday, May 23, 2013, 12:50 PM ET. The NYSE advances/declines ratio sits at 979 issues advancing vs. 1,985 declining with 110 unchanged.

The Industrial Goods sector currently is unchanged today versus the S&P 500, which is down 0.37. On the negative front, top decliners within the sector include Kubota Corporation ( KUB), down 6.90, Nidec Corporation ( NJ), down 2.98, Emerson Electric ( EMR), down 1.42, ABB ( ABB), down 0.95 and Danaher Corporation ( DHR), down 0.70.

TheStreet Ratings group would like to highlight 3 stocks pushing the sector lower today:

3. Precision Castparts ( PCP) is one of the companies pushing the Industrial Goods sector lower today. As of noon trading, Precision Castparts is down $1.92 (-0.9%) to $209.78 on average volume Thus far, 314,981 shares of Precision Castparts exchanged hands as compared to its average daily volume of 619,700 shares. The stock has ranged in price between $207.68-$211.66 after having opened the day at $207.68 as compared to the previous trading day's close of $211.70.

Precision Castparts Corp. manufactures and sells metal components and products worldwide. Precision Castparts has a market cap of $31.2 billion and is part of the industrial industry. The company has a P/E ratio of 21.9, above the S&P 500 P/E ratio of 17.7. Shares are up 11.8% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Precision Castparts as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, impressive record of earnings per share growth and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity. Get the full Precision Castparts Ratings Report now.

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2. As of noon trading, Illinois Tool Works ( ITW) is down $0.65 (-0.9%) to $70.15 on average volume Thus far, 918,868 shares of Illinois Tool Works exchanged hands as compared to its average daily volume of 2.4 million shares. The stock has ranged in price between $70.07-$70.73 after having opened the day at $70.16 as compared to the previous trading day's close of $70.80.

Illinois Tool Works Inc. manufactures and sells a range of industrial products and equipment worldwide. Illinois Tool Works has a market cap of $32.1 billion and is part of the industrial industry. The company has a P/E ratio of 13.4, below the S&P 500 P/E ratio of 17.7. Shares are up 16.4% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Illinois Tool Works as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins, solid stock price performance and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Get the full Illinois Tool Works Ratings Report now.

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1. As of noon trading, Caterpillar ( CAT) is down $0.83 (-0.9%) to $86.87 on average volume Thus far, 3.4 million shares of Caterpillar exchanged hands as compared to its average daily volume of 7.2 million shares. The stock has ranged in price between $85.78-$87.38 after having opened the day at $86.03 as compared to the previous trading day's close of $87.70.

Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. Caterpillar has a market cap of $57.9 billion and is part of the industrial industry. The company has a P/E ratio of 11.9, below the S&P 500 P/E ratio of 17.7. Shares are down 1.7% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Caterpillar as a buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Get the full Caterpillar Ratings Report now.

Exclusive Offer: Jim Cramer's 'go-to' small/mid-cap guru Bryan Ashenberg only buys stocks he thinks could return 50-100%. See his top picks for 14-days FREE.

If you are interested in one of these 3 stocks, ETFs may be of interest. Investors who are bullish on the industrial goods sector could consider Industrial Select Sector SPDR ( XLI) while those bearish on the industrial goods sector could consider ProShares Short Dow 30 ( DOG).

A reminder about TheStreet Ratings group: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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