Could machinery stocks be affected if the Ex-Im bank is dissolved?

By James Dennin for Kapitall.

The Export-Import bank is a small but important remnant of The New Deal, which was President Roosevelt's economic program to lift the country out of the Great Depression in the thirties

Basically, the way the program works is that it gives out cheap loans to foreign buyers who want to buy US goods. For instance, if a German automaker wanted to buy some of Tesla's (TSLA) batteries, they could secure cheap financing from Ex-Im Bank to do so. 

The idea is that by making it easy to faciliate these loans, you're also making it easier to for US firms to export more goods. The downside is that US firms don't have access to the same arrangement, meaning that they sometimes have to pay even more for goods produced in their own back-yard.

Soon-to-be former House Majority Leader Eric Cantor was a major supporter of the program among House Republicans.

Analysts are saying that without high-profile support from House leadership, the agency could be in danger from the Republican's Tea Party wing, who don't think the government should be in the business of granting loans. 

The charter for the agency expires in September, so Congress has a long time to debate whether or not it should be reinstated, reformed, or dissolved. However the largest industrial machinery companies—arguably the biggest beneficiaries of the system, are warily watching the debate. 

We built a list of the six largest industrial machinery stocks by market cap. Depending on how much of their business is conducted overseas, the desolution of the Ex-Im bank could make it much harder for them to find willing buyers.

Do you think Congress will act to save the Ex-Im bank, or will companies have to adapt to using the private market? Use the list below to begin your analysis, and let us know what you think in the comments. 

Click on the interactive chart to view data over time. 


 

1. Boeing Co. ( BA, Earnings, Analysts, Financials): Engages in the design, development, manufacture, sale, and support of commercial jetliners, military aircraft, satellites, missile defense, human space flight, and launch systems and services worldwide. Market cap at $97.88B, most recent closing price at $129.59.

 

2. Caterpillar Inc. ( CAT, Earnings, Analysts, Financials): Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. Market cap at $62.09B, most recent closing price at $97.32.

 

3. General Electric Company ( GE, Earnings, Analysts, Financials): Operates as a technology, service, and finance company worldwide. Market cap at $255.18B, most recent closing price at $25.29.

 

4. Honeywell International Inc. ( HON, Earnings, Analysts, Financials): Operates as a diversified technology and manufacturing company worldwide. Market cap at $73.68B, most recent closing price at $93.76.

 

5. 3M Co. ( MMM, Earnings, Analysts, Financials): Operates as a diversified technology company worldwide. Market cap at $88.36B, most recent closing price at $132.20.


 

6. United Technologies Corp. ( UTX, Earnings, Analysts, Financials): Provides technology products and services to the building systems and aerospace industries worldwide. Market cap at $104.99B, most recent closing price at $116.49.

 

 

(List compiled by James Dennin. Quarterly sales sourced from Zacks Investment Research. All other data sourced from finviz.)

Kapitall Wire is a division of New Kapitall Holdings, LLC. Kapitall Generation, LLC is a wholly owned subsidiary of New Kapitall Holdings, LLC. Kapitall Wire offers free investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by New Kapitall Holdings, LLC, and its affiliate companies.

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