According to the recent quarterly economic forecast by Manufacturers Alliance for Productivity and Innovation (MAPI), U.S. manufacturing production is likely to outpace the overall U.S. economic growth in 2014 on the back of rise in consumer spending combined with increase in business investment. MAPI predicts that U.S. manufacturing will increase 3.2% in 2014 and 4.0% in 2015, outperforming GDP growth, which MAPI estimates will be 2.8% in 2014 and 3.2% in 2015. We note that manufacturing production grew 2.3% during 2013.
MAPI Forecasts that high-tech production (computers and electronic products) will grow 6.8% in 2014 after growing 4.4% during 2013, while non-high-tech or traditional manufacturing will grow 2.9% in 2014 following the 2% growth during 2013. Further, MAPI forecasts that total exports are anticipated to grow 5.1% in 2014, while imports will witness a growth of 3.3% in 2014. Moreover, the overall unemployment is predicted to average 6.4% in 2014 and drop to 5.8% in 2015.
Ubika Research has shortlisted nine attractive U.S. manufacturing stocks which appear to be currently undervalued and are expected to report strong growth during 2014, according to Bloomberg estimates. These stocks have registered strong growth in sales and EPS during trailing twelve months. Moreover, these stocks are currently trading at relatively low forward Price-to-Earning (P/E) and Price to Book (P/B) multiples in comparison to industry average and provide high Return on Equity (ROE) of more than 10%. We note that majority of these stocks have recorded significant gains during the past three months with daily average traded volume in excess of 100,000.
|
Company Name |
Exchange |
Ticker |
Market Cap |
Last Price |
3- Months Average Volume |
3-Months Price Return |
TTM Sales Growth |
Sales Growth |
TTM EPS Growth |
EPS Growth (2014E) |
Current PE |
PE Ratio (2014E) |
Current P/B Ratio |
Return on Equity |
|
Alliant Techsystems Inc |
NYSE |
ATK |
4.2 |
133.37 |
414,617 |
11.3% |
1.4% |
9.0% |
23.1% |
17.9% |
13.1 |
13.6 |
2.4 |
20.0% |
|
Shiloh Industries Inc |
NASDAQ |
SHLO |
0.3 |
17.48 |
123,381 |
-21.5% |
23.2% |
13.5% |
64.0% |
27.0% |
12.8 |
10.9 |
2.3 |
18.1% |
|
AZZ Inc |
NYSE |
AZZ |
1.1 |
43.79 |
184,233 |
-4.5% |
28.4% |
33.8% |
6.1% |
4.4% |
18.2 |
19.4 |
3.0 |
17.8% |
|
TriMas Corp |
NASDAQ |
TRS |
1.5 |
34.30 |
249,634 |
-4.2% |
9.6% |
5.8% |
103.3% |
7.2% |
13.9 |
15.5 |
2.8 |
17.7% |
|
Sonoco Products Co |
NYSE |
SON |
4.2 |
41.53 |
493,071 |
3.4% |
1.3% |
2.7% |
11.0% |
8.5% |
18.0 |
16.6 |
2.5 |
13.7% |
|
Greif Inc |
NYSE |
GEF |
2.5 |
50.42 |
149,802 |
-1.5% |
2.2% |
3.0% |
24.7% |
11.0% |
15.1 |
16.5 |
1.9 |
12.4% |
|
Kaman Corp |
NYSE |
KAMN |
1.1 |
40.56 |
101,185 |
6.8% |
5.6% |
6.9% |
52.2% |
15.7% |
16.8 |
16.2 |
2.1 |
12.3% |
|
China Automotive Systems Inc |
NASDAQ |
CAAS |
0.2 |
8.06 |
103,707 |
5.8% |
18.4% |
19.6% |
54.4% |
10.0% |
10.3 |
10.5 |
1.0 |
12.1% |
|
Stoneridge Inc |
NYSE |
SRI |
0.3 |
11.54 |
134,945 |
-4.2% |
1.0% |
6.2% |
166.7% |
50.0% |
19.3 |
13.7 |
2.1 |
11.7% |
Source: Bloomberg;
TTM: Trailing Twelve Months
Company Description:
Alliant Techsystems Inc (NYSE: ATK)
Alliant Techsystems Inc. develops and supplies advanced weapon and space systems. The company’s offerings include advanced missile systems, precision-guided munitions, electronic warfare and aircraft integration programs, satellite components and sub-systems, military ammunition and gun systems, and supplies ammunition to law enforcement agencies.
Shiloh Industries Inc (NASDAQ: SHLO)
Shiloh Industries, Inc. is a supplier providing light weighting and noise, vibration and harshness (NVH) solutions to automotive, commercial vehicle and other industrial markets. The company delivers these solutions through design engineering and manufacturing of first operation blanks, engineered welded blanks, complex stampings and modular assemblies.
AZZ Inc (NYSE: AZZ)
AZZ Incorporated manufactures specialty electrical equipment and components for the global power generation, power transmission, and distribution markets. The company also provides hot dip galvanizing services to the steel fabrication industry across the United States.
TriMas Corp (NASDAQ: TRS)
TriMas Corporation is a diversified manufacturer of proprietary products. The company manufactures trailer products, recreational accessories, packaging systems, energy products and industrial specialty products for the commercial, manufacturing, and consumer markets.
Sonoco Products Co (NYSE: SON)
Sonoco Products Company manufactures industrial and consumer packaging solutions for customers around the world. The company’s products include flexible packaging, high density film products, and folding cartons. Sonoco Products also has an integrated network of global technology centers focused on materials science, packaging engineering, and process improvement.
Greif Inc (NYSE: GEF)
Greif Inc. manufactures and markets industrial packaging products and services. The company provides steel, plastic, fiber, corrugated and multiwall containers. Greif also produces containerboard and has operations nationwide.
Kaman Corp (NYSE: KAMN)
Kaman Corporation and its subsidiaries serve government and commercial markets through its diversified technologies and distribution segments. The company provides aircraft manufacturing, design and manufacture of advanced technology products and systems, and advanced technology services. Kaman also distributes industrial products.
China Automotive Systems Inc (NASDAQ: CAAS)
China Automotive Systems, Inc. manufactures power steering systems and other related products for different segments of the automobile industry in China. The company focuses on parts, accessories, and new technologies. China Automotive is also targeting customers in North America, the Asia-Pacific countries, and the Middle East.
Stoneridge Inc (NYSE: SRI)
Stoneridge, Inc. designs and manufactures engineered electrical and electronic components, modules, and systems. The company’s customers include the automotive, medium and heavy duty truck, and agricultural vehicle markets. Stoneridge markets its products under a variety of brand names including Alphabet, Berifors, Hi-Stat, Pollak, and PST.
