4 Weakened Industrial Stalwart Stocks to Short

Advertisement

U.S. equities just can’t catch a break.

4 Weakened Industrial Stalwart Stocks to Short

Source: ©iStock.com/blewisphotography

The Dow Jones Industrial Average is melting lower by more than 300 points as of this writing Wednesday afternoon, dropping back to early October levels. The Russell 2000 and the NYSE Composite Index are already back to 2013 levels, with small-cap stocks down more than 20% in what’s officially become a bear market.

The fear and pain is spreading. What started in energy and materials stocks is now hitting popular Big Tech momentum favorites and industrial stalwarts central to the process of creating durable goods like airplanes, locomotives, cars and heavy construction equipment.

The latter group reflects the recent slowdown in key economic data points, such as factory orders and industrial production.

With that in mind, here are four “heavy metal” stocks ready for short plays.

“Heavy Metal” Stocks to Short: Boeing Co (BA)

1-13-16-BA

Boeing Co (BA) shares have lingered over the past year on concerns over the renewal of the U.S. Import-Export Bank (used for financing jet purchases), global demand and the rise of Chinese aircraft manufacturing.

Shares have dropped below the $130 level crossed in November 2013, setting up a test of the August lows.

We’ll know more when the company reports results on Jan. 27 before the bell. Analysts are looking for earnings of $2.14 per share on revenues of $23.5 billion.

“Heavy Metal” Stocks to Short: Caterpillar Inc. (CAT)

1-13-16-CAT-stock

Driven by a energy/materials industry slowdown from weakness in China and other emerging market economies, Caterpillar Inc. (CAT) shares have been a disaster zone since the summer of 2014.

The stock is down more than 43% from its high and has broken to fresh lows over the past week, returning to levels not seen since the 2011 market meltdown.

We’ll know more when the company reports results on Jan. 28 before the bell. Analysts are looking for earnings of 69 cents per share on revenues of $11.47 billion.

“Heavy Metal” Stocks to Short: Ford Motor Company (F)

1-13-16-F-Stock

Ford Motor Company (F) shares are bleeding lower after spending the last three years bouncing near highs first hit in early 2011.

This is first significant downtrend for the automaker in more than three years as doubt grow about the sustainability of the recent pace of auto sales.

We’ll know more when the company reports results on Jan. 28 before the bell. Analysts are looking for earnings of 48 cents per share on revenues of $36.23 billion.

“Heavy Metal” Stocks to Short: General Electric Company (GE)

1-13-16-GE-Stock

Aside from the occasional excursion below its 200-day moving average, General Electric Company (GE) shares have been in an almost uninterrupted uptrend since 2009.

But now the company’s share-buyback, cost-cutting focus has already run its course with interest rates moving higher and restructuring efforts already done. Boosting profitability from here will require revenue growth that will be increasingly difficult in this tough global macroeconomic environment.

We’ll know more when the company reports results on Jan. 22. Analysts are looking for earnings of 50 cents per share on revenues of $35.93 billion.

Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.

More From InvestorPlace


Article printed from InvestorPlace Media, https://investorplace.com/2016/01/stocks-to-short-ba-cat-f-ge/.

©2024 InvestorPlace Media, LLC