Industrial Stocks: Mixed News on the Future of U.S. Factories

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(List compiled by Becca Lipman)

Good news for US factories: Orders for motor vehicles and aircrafts have increased in July to its highest levels in four months, negating the drop in orders for business equipment.

In total, U.S factories orders increased by 2.5%, beating analyst expectations. This is according to Bloomberg, which writes, "Factory orders were projected to rise 2 percent, following a previously reported drop of 0.8 percent in June, according to the Bloomberg survey of 59 economists. Estimates ranged from gains of 0.6 percent to 3.5 percent."

"Demand for durable goods, which make up just over half of total factory demand, rose 4.1 percent" according to today's Institute for Supply Management report. Non-durable goods rose 1%.

But how good is this good news? The earthquake in Japan slowed down manufacturing, and July's stellar increase could simply be the industry "catching up" with the halted demand.

In fact, without the demand for planes and automobiles, factories orders overall fell "0.9 percent, less than estimated last week, after rising 0.8 percent the prior month."

Weak demand and an uncertain future means even fewer orders are expected. Meanwhile, big-ticket orders can only sustain the industry for so long.

According to Bloomberg, business activity in August expanded at a slower pace while the economy's "business barometer" is reportedly on the fence (53 of 100) of expansion and contraction, and expected to dip even closer towards the danger zone (below 50).

Interested in keeping tabs on the future of factories? To help you follow the industry, we list below this year's best performing large cap (over $10B) industrial goods stocks.

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1. Precision Castparts Corp. (PCP): Metal Fabrication Industry. Market cap of $23.60B. In the past year, the company gained 36.69% in market value. The stock has had a couple of great days, gaining 5.53% over the last week.

2. Caterpillar Inc. (CAT): Farm & Construction Machinery Industry. Market cap of $58.79B. In the past year, the company gained 36% in market value. The stock has had a couple of great days, gaining 6.56% over the last week.

3. Fluor Corporation (FLR): Heavy Construction Industry. Market cap of $10.55B. In the past year, the company gained 31.8% in market value. The stock has had a couple of great days, gaining 5.47% over the last week.

4. Goodrich Corp. (GR): Aerospace/Defense Products & Services Industry. Market cap of $11.15B. In the past year, the company gained 26.32% in market value. The stock has gained 26.32% over the last year.

5. Deere & Company (DE): Farm & Construction Machinery Industry. Market cap of $33.92B. In the past year, the company gained 23.6% in market value. The stock has had a couple of great days, gaining 7.62% over the last week.

6. Dover Corp. (DOV): Diversified Machinery Industry. Market cap of $10.70B. In the past year, the company gained 23.01% in market value. The stock has had a couple of great days, gaining 5.85% over the last week.

7. Parker Hannifin Corporation (PH): Industrial Equipment & Components Industry. Market cap of $11.91B. In the past year, the company gained 20.04% in market value. The stock has had a couple of great days, gaining 8.82% over the last week.

8. Honeywell International Inc. (HON): Aerospace/Defense Products & Services Industry. Market cap of $37.41B. In the past year, the company gained 19.91% in market value. The stock has had a couple of great days, gaining 6.67% over the last week.

9. Eaton Corporation (ETN): Industrial Electrical Equipment Industry. Market cap of $14.65B. In the past year, the company gained 17.83% in market value. Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 3.17%, current ratio at 1.74, and quick ratio at 1.22. The stock has had a couple of great days, gaining 5.53% over the last week.

10. Cummins Inc. (CMI): Diversified Machinery Industry. Market cap of $18.09B. In the past year, the company gained 17.74% in market value. The stock has had a couple of great days, gaining 7.32% over the last week.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks


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