By James Dennin for Kapitall.
Industrial production rose about 0.2% this month, rounding out
the strongest quarter in almost four years. Over the
quarter, production at factories, utilities, and mines grew at an
annualized rate of 5.5%,
the highest since 2010
A lot of the growth has come from a resurgent auto sector. When
families buy more cars, it drives up demand for aluminum, component
parts, and factory equipment. The gain in
automobile manufacturing output was its largest in
The Institute for Supply Management's Factory index still
signals expansion and is mostly unchanged near a five-month
In the event that manufacturing continues to gain speed going
into the rest of the year, we decided to screen industrial goods
To do that, we started with a list of the entire industrial
goods sector, and then built a list of stocks with a
price-to-equity (P/E) ratio below 20
, indicating that the stock isn't trading at a large
Next, we screened for stocks that had
spikes in instutional buying
from groups like pensions and hedge funds. Since the managers of
these funds often have access to the best information, these spikes
in purchasing are often seen as a catalyst for stock
This left us with three industrial stocks on our list, all
working in housing and construction. Do you think the market will
continue to grow? 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
1. MDC Holdings Inc.
): Engages in homebuilding and financial services businesses in the
United States. Market cap at $1.43B, most recent closing price at
Net institutional purchases in the current quarter at 3.9M
shares, which represents about 11.29% of the company's float of
34.55M shares. Major holder: State Street Corporation at a 6.97%
P/E at 4.75.
2. Meritage Homes Corporation
): Engages in designing and building single-family attached and
detached homes in the southern and western United States. Market
cap at $1.64B, most recent closing price at $42.01.
Net institutional purchases in the current quarter at 4.1M
shares, which represents about 11.89% of the company's float of
34.49M shares. Major holder: BlackRock Fund Advisors at a 8.34%
P/E at 11.70.
3. PGT, Inc.
): Engages in the manufacture and sale of windows and doors. Market
cap at $387.76M, most recent closing price at $8.21.
Net institutional purchases in the current quarter at 6.7M
shares, which represents about 15.74% of the company's float of
42.57M shares. Major holder: Renaissance Technologies, LLC at a
P/E at 16.53.
(List compiled by James Dennin. Monthly returns sourced from
Zacks Investment Research, institutional purchasing data sourced
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