According to a recent report on U.S. Industrial Outlook by Manufacturers Alliance for Productivity and Innovation (MAPI), U.S. manufacturing production will increase 3.4% in 2014 and 4.0% in 2015, outperforming GDP growth, which MAPI estimates will be 2.2% in 2014 and 3.0% in 2015. We note that manufacturing production grew 2.1% during 2013. MAPI estimates that U.S. economy will witness a steady growth but there is a little expectation for a significant upward trajectory. MAPI forecasts that high-tech production (computers and electronic products) will grow 4.7% in 2014 and 8.5% in 2015 after growing 4.4% during 2013, while non-high-tech or traditional manufacturing will grow 3.2% and 3.8% in 2014 & 2015 respectively following the 2% growth during 2013. Moreover, MAPI estimates an increase of 184,000 manufacturing jobs in 2014, up from the anticipated 158,000 jobs in the May forecast and 315,000 additional jobs in 2015.
Today, we have shortlisted 11 U.S. industrial stocks which appear to be currently undervalued and are expected to report strong growth in sales and EPS during 2014 and 2015, according to Bloomberg polls. These stocks are currently trading at relatively low forward Price-to-Earning (P/E), Price to Book (P/B) in comparison to industry average. Moreover, these stocks provide high return on equity. We note that a majority of these stocks have recorded significant gains in the past one month with daily average traded volume in excess of 100,000.
|
Company Name |
Exchange |
Ticker |
Market Cap |
Last Price |
Average Volume |
Price Change |
Sales Growth |
Sales Growth |
EPS Growth (2014E) |
EPS Growth (2015E) |
1-Yr Forward PE Ratio |
P/B Ratio |
ROE |
|
Dorman Products Inc |
NASDAQ |
DORM |
1.6 |
43.97 |
438,425 |
-11.3% |
16.3% |
12.6% |
16.2% |
14.6% |
16.9 |
3.5 |
21.9% |
|
Crane Co |
NYSE |
CR |
4.1 |
70.00 |
249,943 |
-1.3% |
16.2% |
6.1% |
11.6% |
11.3% |
15.0 |
3.1 |
18.5% |
|
Terex Corp |
NYSE |
TEX |
4.1 |
37.33 |
2,211,977 |
3.5% |
6.1% |
6.8% |
15.4% |
34.5% |
14.5 |
1.8 |
16.6% |
|
GATX Corp |
NYSE |
GMT |
3.0 |
66.43 |
254,496 |
2.1% |
8.7% |
6.6% |
23.9% |
12.8% |
15.3 |
2.2 |
15.6% |
|
Wabash National Corp |
NYSE |
WNC |
1.0 |
14.14 |
533,731 |
5.6% |
10.6% |
5.8% |
22.0% |
25.8% |
16.6 |
2.8 |
15.5% |
|
Boise Cascade Co |
NYSE |
BCC |
1.2 |
30.39 |
315,684 |
2.2% |
9.6% |
13.6% |
53.6% |
31.9% |
16.5 |
2.5 |
12.2% |
|
Plexus Corp |
NASDAQ |
PLXS |
1.4 |
41.06 |
165,862 |
2.8% |
6.4% |
11.1% |
15.7% |
14.2% |
15.0 |
1.8 |
11.8% |
|
Barnes Group Inc |
NYSE |
B |
1.9 |
34.66 |
307,040 |
-5.1% |
16.2% |
5.1% |
24.1% |
10.6% |
15.3 |
1.6 |
9.4% |
|
Newport Corp |
NASDAQ |
NEWP |
0.8 |
19.03 |
153,073 |
10.0% |
9.1% |
6.7% |
28.6% |
20.7% |
14.1 |
2.2 |
8.3% |
|
Tutor Perini Corp |
NYSE |
TPC |
1.5 |
30.25 |
188,149 |
10.2% |
8.9% |
15.4% |
27.5% |
27.8% |
13.2 |
1.1 |
8.2% |
|
Vishay Intertechnology |
NYSE |
VSH |
2.3 |
15.93 |
854,501 |
6.6% |
7.1% |
5.7% |
27.5% |
20.5% |
15.8 |
1.2 |
6.9% |
Source: Bloomberg
Company Description:
Dorman Products Inc (NASDAQ: DORM)
Dorman Products, Inc. supplies automotive products and home hardware. The company supplies its products to the automotive aftermarket and mass merchandise markets.
Crane Co (NYSE: CR)
Crane Co. manufactures engineered industrial products. The company’s products include vending machines, airplane braking devices, pumps, valves, and other industrial goods. Crane serves the aerospace manufacturing, power generation, hydrocarbon processing, commercial and residential building, plumbing, and food and beverage production industries.
Terex Corp (NYSE: TEX)
Terex Corporation is a diversified global manufacturer operating in four business segments: aerial work platforms; construction; cranes; and materials processing. Terex manufactures a broad range of equipment for use in various industries including the construction, infrastructure, quarrying, mining, shipping, transportation, refining, energy and utility industries.
GATX Corp (NYSE: GMT)
GATX Corporation leases, operates, manages and remarkets long-lived, widely used assets, primarily in the rail and marine markets. The company leases tank cars, freight cars and locomotives in North America, Europe and India. GATX Corp. also actively manages transportation and other leased assets on behalf of third parties.
Wabash National Corp (NYSE: WNC)
Wabash National Corporation manufactures semi trailers in North America. The company specializes in the design and production of dry freight vans, refrigerated vans, flatbed trailers, drop deck trailers, dump trailers, truck bodies and intermodal equipment.
Boise Cascade Co (NYSE: BCC)
Boise Cascade Company manufactures and markets wood products. The company offers lumber, plywood, engineered wood, and particleboard, as well as adhesive sealants, concrete, fasteners, flashing, vents, framing accessories, gypsum, insulating, locks, and roofing products.
Plexus Corp (NASDAQ: PLXS)
Plexus Corp. is a participant in the Electronics Manufacturing Services (EMS) Industry, providing product design, supply chain and materials management, manufacturing, test, fulfillment and aftermarket solutions to branded product companies in the Wireline/Networking, Wireless Infrastructure, Medical, Industrial/Commercial and Defense/Security/Aerospace market sectors.
Barnes Group Inc (NYSE: B)
Barnes Group Inc. is a diversified international manufacturer of precision metal parts and is a distributor of industrial supplies, serving a wide range of markets and customers. The company’s products include precision mechanical and nitrogen gas springs and aircraft engine and airframe components and assemblies. Barnes also distributes maintenance, repair, and operating supplies.
Newport Corp (NASDAQ: NEWP)
Newport Corporation supplies advanced technology products and solutions for fields such as Research, Life & Health Science, Aerospace & Defense, Industrial Manufacturing, Semiconductors, and Microelectronics. The company’s products include lasers and light sources, optomechanical components and mounts, optical filters and gratings, spectroscopic, and photonic instruments.
Tutor Perini Corp (NYSE: TPC)
Tutor Perini Corporation and its subsidiaries provide general contracting, construction management and design-build services to private clients and public agencies throughout the United States and selected overseas areas.
Vishay Intertechnology Inc (NYSE: VSH)
Vishay Intertechnology, Inc. manufactures a broad line of passive and discreet active electronic components, particularly resistors, capacitors, inductors, diodes, and transistors. The company’s products are utilized in computers, telephones, televisions, automobiles, household appliance, medical equipment, satellites, and military and aerospace equipment.
