Looking for growth is becoming increasingly difficult. There’s the uncertainty of the coming November elections, which holds investors in place. Remember, the markets hate uncertainty. Then add to that the sluggish (at best) global economy. Even the U.S. economy is seeing less-than-inspiring numbers.
The big companies that make up the S&P 500 Index are not impressing on the earnings front. Biotech is treading water, as is healthcare. The trick is to look for companies within sectors that are individually doing well. Here we chose the industrial sector, predominantly in the U.S.
This makes up a broad spectrum of industries, so I had to put them through the next filter, subsectors of opportunity. The seven industrial stocks to buy now are the top of that list.
These companies are in the right place at the right time, so it’s time you get on board.
Industrial Stocks to Buy: Gibraltar Industries Inc (ROCK)
Gibraltar Industries Inc (NASDAQ:ROCK) is a Buffalo, NY-based manufacturer of broad range of materials and equipment across industrial and residential markets.
One the one hand, it builds mail boxes and roofing supplies for houses. On the other, it sells materials that help maintain the roads and bridges across the U.S. A growing U.S. economy starts in these two sectors.
More money from more revenue gets pumped into infrastructure projects at the state and federal level to private contractors like ROCK, and as wages continue to rise and interest rates stay low, home ownership becomes an attractive option for individuals.
ROCK recently reported its second-quarter earnings and they were impressive. While sales were up only 4% for the quarter compared to the same quarter a year ago, net income was up 90%. Diluted earnings per share were up 84% year-over-year.
And according to CML News, ROCK is realizing triple-digit gains over one- and two-year periods. That is a bright marker of momentum growth moving forward.
Industrial Stocks to Buy: Mueller Water Products, Inc. (MWA)
Mueller Water Products, Inc. (NYSE:MWA) does it exactly what its name implies. It makes pipes and other products for municipalities and commercial water projects. It’s the leading fire hydrant maker in the U.S.
That may not sound like something significant, but by MWA estimates, it has more than 3 million fire hydrants in operation right now. And a fire hydrant runs about $1,000. That’s a pretty solid, steady business.
You see, while the hydrants last for decades, the gaskets and seals tend to give out and most old hydrants don’t have available parts, so it’s easier to just replace the hydrant. Some estimates hold that there are 10-20 million hydrants in the U.S., MWA has plenty of potential work in this sector.
What’s more, as the economy expands and more development happens, that means more water and sewer systems and fire hydrants.
Finally, MWA is a beneficiary of cheap commodities prices, since it pays less for steel and iron its margins grow.
The company has been around since before the Civil War, so it has seen its share economic cycles and thrived through them all.
Industrial Stocks to Buy: John Bean Technologies Corp (JBT)
John Bean Technologies Corp (NYSE:JBT) is a materials and solutions provider for the food processing and air transport industries. In short, it provides a number of different kinds of packaging for the food processing industry. In the air transport space, it designs, manufactures and services airport ground-support and gate equipment as well as provides services where needed.
As air travel grows (and given the sustained low prices for gasoline), there will continue to be a growing amount of individuals who look to the air for their next business or holiday trip.
What’s more, with the new generation in healthy frozen foods and prepared meals (not to mention the harried lifestyles of the modern family), demand for food packaging is increasing. And low commodities prices mean JBT’s inputs are cheap, giving it more pricing flexibility.
The proof: In its second-quarter numbers released this week, revenue was up 29% and operating profit was up 38%.
Industrial Stocks to Buy: Virgin America Inc (VA)
Virgin America Inc (NASDAQ:VA) operates a fleet of about 60 planes between U.S. and Mexico. It primarily operates out of Los Angeles and San Francisco, but also has hubs in major cities across the U.S., including Dallas, New York City and Washington, DC.
In April, Alaska Air Group, Inc. (NYSE:ALK) announced it was buying VA for $2.6 billion. ALK has been hurt by purchase, as some analysts think ALK paid too much for VA.
But given VA’s recent passenger numbers from June, it looks increasingly like ALK knew what it was doing. Load factor — how full each plane is — was up in June, as was available seat miles and revenue passenger miles.
Plus, VA has announced service into Newark International from Los Angeles, starting in November.
This gives ALK a large amount coverage of the lower 48, and both airlines share the same customer-friendly, but cost-conscious attitude.
With low fuel costs, margins are high and likely to stay there for the forseeable future.
Industrial Stocks to Buy: BWX Technologies Inc (BWXT)
BWX Technologies Inc (NYSE:BWXT) is one of the most well-moated companies in the entire public sector.
It builds, designs and manufactures naval nuclear equipment. It also works with the Department of Energy on land-based nuclear components as well.
The company, formerly Babcock & Wilcox started in 1856 in the steam engine business. Thomas Edison’s first power station in New York City was powered by 4 of the company’s steam engines. By the turn of the century, it was putting its steam engines on naval and commercial vessels. In World War II, it was a player in the Manhattan Project that developed the first nuclear bomb.
Then, in 1946, it was awarded a contract to research propulsion systems for the U.S. Navy. And BWXT has been a steady and reliable niche player in the space ever since.
With a new generation of portable nuclear power supplies in development, BWXT has a bright future ahead of it.
Industrial Stocks to Buy: Copart, Inc. (CPRT)
Copart, Inc. (NASDAQ:CPRT) is in the right niche at the right time. It is in the used car business. But it’s not a retailer. It is an auction house for damaged, recovered stolen and repossessed cars and other motor vehicles.
Some of its biggest customers are financial institutions as well as insurance companies, charities, and used car dealers. One of its other sources of revenue is selling to dismantlers and parts companies. You can buy everything from car fleets to snowmobiles to car front ends. It has an inventory of over 124,000 cars.
This is a market that has exploded due to the internet. Now bidders can bid from virtually anywhere on the globe.
And business is brisk. Margins are increasing, return on equity has almost doubled in the past year and the stock is up 33% year to date.
Industrial Stocks to Buy: Hillenbrand, Inc. (HI)
The name Hillenbrand, Inc. (NYSE:HI) was for decades associated with death. But not in a bad way. It was a leading maker of caskets and other products for what is currently termed, “the death care industry.”
And given the fact that there was no real way to avoid the ultimate end, HI (now Batesville division) was a solid, reliable company.
But in recent decades, younger generations were looking for alternatives to the traditional death care services of their parents. And this started hurting the growth in these sector specific firms.
Private equity investors saw an opportunity and bought the rock-solid unit and added on some industrial companies it calls “the Process Equipment Group.” It designs, sells, installs and supports industrial equipment across a wide range of industries, including plastics, chemicals, foods, pharmaceuticals energy and fertilizers.
This side of the business is the growth engine, while Batesville powers its solid 2.5% dividend. As the U.S. economy gets its sea legs back, HI will be a prime beneficiary.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.