I would be tempted to say that these stocks are “industrials,” but that name has such a 19th century feel to it.
These stocks are focused on the B2B side of their respective businesses, but they’re not all stamping out widgets and sprockets. These are 21st century service companies and tech companies as well. They have built businesses that are important underpinnings of the economy. They’re the firms that may be invisible to consumers, but make the world turn.
Long ago, Charles Dow, the founder of Dow Jones & Company as well as the The Wall Street Journal, came up with a theory about the markets that became known, simply, as “Dow Theory.” Dow set out six precepts more than 100 years ago, which have been refined ever since.
His starting point was, you can tell which way the markets are moving if you watch the interaction of the transports and the industrials. If transports are expanding, then it’s likely industrials will also grow because the economy is demanding more products. If industrials are supplying more than the economy demands, transports will slack off.
The complexities begin from there, but the point is industrials are the bedrock of the economy. And as the economy recovers, finding the best will be very profitable. The following are my seven A-rated stocks to buy that will bore you to the bank.
New Industrial Stocks to Buy: Viad (VVI)
Viad Corp (NYSE:VVI) is an interesting company that is emblematic of the new modern age of industry. It is a self-described “international experiential services” company.
What does that mean? Well, it’s a Canada-based company with two divisions: one is an events marketing and planning company and the other is a Canadian-focused travel services company.
Basically, the marketing division puts on major exhibitions and events around the world. And because some large companies have major events on different continents every year, VVI can help create consistent services and exhibitions. It’s a one-stop shop for major corporate clients as well as major industry shows like the Consumer Electronics Show that goes on in Las Vegas every year.
Live event markets are becoming increasingly popular, especially because they can be broadcast worldwide, thanks to the internet and faster bandwidth speeds. Right now, this is a $7 billion market, of which VVI has about of $1 billion of.
The stock is up 40%-plus in the past six months, and the growth will continue as it blows revenue expectations out of the water.
New Industrial Stocks to Buy: Cemtrex (CETX)
Cemtrex Inc (NASDAQ:CETX) is a diversified supplier to a number key industrial sectors. The Long Island, New York-based firm has two divisions: Industrial Products & Services and Electronic Manufacturing Services. Each division generates about half of CETX’s revenues.
Its client base includes major industrial players like Duke Energy Corp (NYSE:DUK), Chevron Corporation (NYSE:CVX), BASF SE (ADR) (OTCMKTS:BASFY), Corning Incorporated (NYSE:GLW), Georgia Pacific, Mercedes Benz, ABB Ltd (ADR) (NYSE:ABB) and Harman International Industries Inc (NYSE:HAR). And this kind of list explains how CETX went from $12 million in revenues in 2012, to $90 million-plus in revenues in 2016. It is growing at a blazing pace.
And that growth will continue because CETX is focused on the right markets moving forward. What’s more, because a majority of the business comes from outside the U.S., it will not be buffeted by any issues the Trump administration may bring on its U.S. business.
Although part of its growth strategy is to take advantage of any in-shoring of manufacturing and energy production in the U.S.
In the past three months the stock is up 100%. This is the beginning of a long ride for this new industrial.
New Industrial Stocks to Buy: Waste Connections (WCN)
Waste Connections Inc (TSE:WCN) is Canada’s version of U.S. waste titan Waste Management, Inc. (NYSE:WM). Don’t worry about its Toronto Stock Exchange listing — this isn’t a tiny company that will disappear or become a silver mining company overnight. It has an $18 billion market cap. That’s a very respectable player in the Canadian market.
WCN is also very well represented in the U.S. because one of its markets is directly connected with the U.S. and Canadian energy sectors – it specializes in oilfield waste treatment, recovery and disposal.
So, it has a recession-proof conventional waste business and a dynamic energy-based business throughout the U.S. and Canada. As the energy patch recovers this will mean a lot more business for WCN.
The stock is up 48% in the past 12 months. As more exploration and production firms come back on line, WCN will see even more growth.
New Industrial Stocks to Buy: Tetra Tech (TTEK)
Tetra Tech, Inc. (NASDAQ:TTEK) is major global engineering and consulting firm that specializes in resource management and infrastructure projects.
TTEK works on everything from the largest desalination plant in the U.S. to the Alaska pipeline to iron ore transport facilities in Australia to remediating the world’s largest uranium mine.
Just in the past six months, TTEK has won two contracts worth $600 million; one with the U.S. Navy, and another with the U.S. Department of Energy. That’s a pretty strong finish to 2016, especially for a company with a $2 billion market cap.
It also may explain why TTEK is up nearly 70% in the past 12 months. But this is just the beginning for this firm. It has such a broad and diversified portfolio and a reputation that goes back to 1966, it’s a go-to company as industries and governments look to modernize and upgrade its infrastructure.
New Industrial Stocks to Buy: Quad/Graphics (QUAD)
Quad/Graphics, Inc. (NYSE:QUAD) is a printer that has been around for more than 45 years. It may be odd to think that a print company would not only be a national player in the 21st century, but a top stock pick to boot. This is supposed to be the “Paperless Age,” right?
Well, as you well know, it seems there is more paper now than ever. And given advances in printing technologies, as well as shift user experience expectations, business is more focused than ever on delivering relevant, compelling and clean products at a reasonable price.
From its humble beginnings in Sussex, Wisconsin, QUAD is now a national player. That affords QUAD economies of scale that other printers don’t have. It also allows it to access clients that have locations around the country and become a one-stop shop for these big clients.
QUAD is up a stunning 186% in the past 12 months and it stills throws off a tantalizing 4.75% dividend yield. QUAD is onto something, and there’s plenty of growth left in this stock.
New Industrial Stocks to Buy: Acme (ACU)
Acme United Corporation (NYSEMKT:ACU) is one of those companies that you have never heard about but have likely used its products on more than one occasion.
It began — and continues — as making cutting, measuring, first-aid and sharpening products for the school, home and office. Its Westcott brand of rulers and scissors has been around since 1872. Its Clauss Tools line is for industrial, hardware, and lawn and garden uses. It has been around since 1877.
The point is, ACU may not be in an exciting sector of the market, but what it does, it has done very well for a very long time. That is the kind of stock you want to build a portfolio around because it has proven time and again that it will be there come what may.
Nowadays, ACU has expanded operations beyond the U.S. to Canada, Europe and Asia. ACU is up about 30% in just the past three months, so this is a good time to get in to catch its remaining momentum.
New Industrial Stocks to Buy: Amrep (AXR)
Amrep Corporation (NYSE:AXR) has had a tough few years. It is split into two diversions, its real estate division that concentrates on developing properties around Albuquerque, New Mexico, and its fulfillment and database management division.
It’s not hard to imagine how the stagnant real-estate market has affected AXR over the past few years. Add to that the troubles media companies and other have had transitioning to online versus paper-based products.
But now both divisions are starting to see some life again. And this once-ignored company is coming back on investors’ radar.
That’s evident in AXR’s recent 45% run in the past six months. The economy is coming back, the Federal Reserve is raising rates and companies are starting to market again. All this is great news for AXR.
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.