4 Manufacturing Tools Stocks to Watch on Prospering Industry Trends

Industry Overview - The Zacks Manufacturing-Tools & Related Products industry is expected to grow due to strong demand for machinery tools in industrial and automotive sectors, driven by urbanization and investments in product development [1][4] - The industry includes companies that develop and distribute various tools and technologies used across multiple sectors, including industrial, commercial, oil & gas, and automotive [3] Growth Drivers - Strength in end markets, particularly in industrial, automotive, and packaging, is anticipated to boost the industry's growth, with increased reliance on electrical devices further driving demand for manufacturing tools [4] - Continuous investments in product development and innovation are crucial for maintaining competitiveness, although they may lead to highly leveraged balance sheets [5] - An acquisition-based growth strategy is being employed by industry participants to expand customer reach and product offerings, allowing them to enter new markets and mitigate risks associated with reliance on a single market [6] Market Performance - The Zacks Manufacturing-Tools & Related Products industry currently holds a Zacks Industry Rank of 84, placing it in the top 34% of over 250 Zacks industries, indicating solid prospects [7][8] - Over the past year, the industry has underperformed compared to the sector and the S&P 500, with a growth of 3.1% against the sector's 16.6% and the S&P 500's 26.4% [9] Valuation Metrics - The industry is trading at a forward 12-month Price-to-Earnings (P/E) ratio of 18.95X, which is lower than the S&P 500's 22.33X and the sector's 19.65X [11] Key Companies - Core & Main, Inc. (CNM) is benefiting from increased demand for its products and recent acquisitions, with a revised earnings estimate of $2.16 per share for fiscal 2024 [13][14] - Stanley Black & Decker, Inc. (SWK) is expected to gain from a global cost-reduction program and has seen a 0.5% upward revision in its earnings estimate for 2024 [16][17] - Lincoln Electric Holdings (LECO) is focusing on strategic acquisitions and new product launches to drive growth, with a history of exceeding earnings estimates [23][19] - Kennametal Inc. (KMT) is experiencing momentum in its Infrastructure segment and has made significant investments in product development [21][22]