For immediate release
Chicago, IL – June 6, 2022 – Zacks.com announces the list of stocks featured in the analyst blog. Every day, Zacks Equity Research analysts discuss the latest news and events impacting stocks and financial markets. Stocks recently featured in the blog include: AZZ Inc. AZZ, Applied Industrial Technologies, Inc. AIT, Titan International, Inc. TWI and Helios Technologies, Inc. HLIO.
Here are highlights from Friday’s analyst blog:
4 stocks to buy on continued manufacturing expansion
Manufacturing activity is growing rapidly despite major challenges such as rising raw material costs and supply chain crisis. This proves once again that despite all the challenges, the country’s economic recovery remains solid.
According to the Institute for Supply Management (“ISM”), manufacturing activity continued to grow in May. Although people have started to spend more on services, demand for goods remains strong, which has boosted manufacturing activity. Thus, actions such as AZZ inc., Applied Industrial Technologies, Inc.,Titan International, Inc. and Helios Technologies, Inc. are likely to benefit from it in the short term.
Manufacturing activity increases
The ISM said on June 1 that the manufacturing sector in the United States rose in May for the 24th consecutive month. The ISM Manufacturing Purchasing Managers’ Index (“PMI”) rose to 56.1 from 55.4 in April, beating economists’ expectations of a drop to 54.5. Any reading above 50 is an indication of continued economic expansion.
Although manufacturing activity expanded, it was on a downward trend until April 2021, when the economic recovery was still accelerating from the pandemic. However, it showed improvement and the reading has remained above 50 since then, indicating that the country’s economic recovery remains strong heading into the summer.
The PMI for new orders rose to 55.1% in May, up 1.6% from April’s 53.5%. The production index rose to 54.2% in May from 53.6% in April, reflecting an increase of 0.6%. The index for new export orders jumped to 52.9% in May, up 0.2% from 52.7% in April.
The manufacturing sector is recovering rapidly
The 24th straight month of growth is an indication that despite challenges like rising prices, the manufacturing sector hasn’t been hit much. One of the main reasons for this growth is the growing demand for goods.
Although people have started spending aggressively on services again, as restrictions continue to ease and the economy reopens, demand for manufactured goods has increased.
This is definitely a good sign for the manufacturing sector, which was hit hard during the height of the pandemic. However, it started to rebound as soon as the economy started to reopen and gained momentum from the first half of 2021.
Also, people are much more confident now after being fully vaccinated. Businesses and factories have also started operating at peak levels, indicating that manufacturing activity will pick up speed in the coming days.
Moreover, people also overspend. Despite rising costs, personal spending in the United States rose 0.9% in April, according to the Commerce Department. In addition, personal income rose 0.4% in April. This demonstrates that people have the financial means to spend and are willing to do so, two factors that act as catalysts for the manufacturing sector.
Given this scenario, we have selected four stocks that could be ideal investments. These stocks have a Zacks rank of #1 (strong buy) or 2 (buy) and guarantee good returns. You can see the full list of today’s Zacks #1 Rank stocks here.
AZZ inc. is a global provider of metal coating services, welding solutions, specialty electrical equipment and highly technical services to the power generation, transmission, distribution and industrial markets in the protection of metal and electrical systems used to build and improve global infrastructure.
AZZ Inc’s expected earnings growth rate for the current year is 14.7%. The Zacks consensus estimate for current-year earnings has improved 12.6% over the past 60 days. AZZ wears a Zacks Rank #1.
Applied Industrial Technologies, Inc. is a distributor of value-added industrial products including engineered hydraulic components, bearings, specialty flow control solutions, power transmission products and various industrial supplies. AIT is also well known in the market for its engineering, design and systems integration services.
Applied Industrial Technologies’ expected profit growth rate for the current year is 31.7%. The Zacks consensus estimate for current-year earnings has improved 5.9% over the past 60 days. AIT sports a #1 Zacks rank.
Titan International, Inc. is one of the world’s leading manufacturers of off-road wheels, tires, assemblies and undercarriages. TWI produces a wide range of products globally to meet the specifications of original equipment manufacturers and aftermarket customers in the agricultural, earthmoving/construction and consumer markets.
Titan International’s expected profit growth rate for the current year is 84.7%. The Zacks consensus estimate for current-year earnings has improved 35.3% over the past 60 days. TWI sports a #1 Zacks rank.
Helios Technologies, Inc. is an industrial technology company. It develops and manufactures hydraulic and electronic control solutions. HLIO’s operating subsidiaries include Sun Hydraulics, Enovation Controls and Faster Group. Helios Technologies’ operating business segment includes hydraulics and electronics.
Helios Technologies’ forecast earnings growth rate for the current year is 7.3%. The Zacks consensus estimate for current-year earnings has improved 1.3% over the past 60 days. HLIO has a #2 Zacks rank.
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Past performance is not indicative of future results. The potential for loss is inherent in any investment. This document is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold any security. No recommendation or advice is given as to whether any investment is suitable for any particular investor. It should not be assumed that investments in the securities, companies, sectors or markets identified and described have been or will be profitable. All information is current as of the date hereof and is subject to change without notice. The views or opinions expressed may not reflect those of the company as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management of securities. These returns come from hypothetical portfolios composed of stocks with Zacks Rank = 1 that have been rebalanced monthly without transaction fees. These are not the returns of actual stock portfolios. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for more information on the performance figures displayed in this press release.
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