4 Stocks to Gain From the Promising Industrial Manufacturing Industry

Industry Overview - The Zacks Manufacturing – General Industrial industry is experiencing growth due to the recovery in domestic and export orders for industrial products and the rise in e-commerce business [1] - Companies in this industry produce a variety of industrial equipment and provide services to sectors such as mining, oil and gas, agriculture, and transportation [2] Current Trends - Industrial production increased by 0.4% in March 2024, with manufacturing output rising by 0.5%, indicating a positive trend in manufacturing activities [3] - The ISM's manufacturing index registered 50.3% in March 2024, signaling expansion in U.S. manufacturing activity [3] - The New Order Index increased by 2.2 percentage points, suggesting a return to expansion territory for new orders [3] Supply Chain and Technological Advancements - Supply-chain disruptions are easing, particularly regarding electronic components, which is expected to support growth in 2024 [4] - Companies are focusing on digitizing operations, enhancing competitiveness through improved productivity and lower costs [4] Financial Performance and Valuation - The Zacks Manufacturing – General Industrial industry ranks 69, placing it in the top 27% of over 250 Zacks industries, indicating strong near-term prospects [6] - The industry's earnings estimates for the current year have increased by 2.7% over the past year, reflecting positive analyst sentiment [7] - The industry has outperformed both the broader sector and the S&P 500 index, appreciating by 27% compared to 23.6% and 23.5% respectively [8] Current Valuation Metrics - The industry is currently trading at a forward 12-month Price-to-Earnings (P/E) ratio of 22.02X, higher than the S&P 500's 20.75X and the sector's 18.26X [9] Notable Companies - Applied Industrial Technologies (AIT): Expected to benefit from strength in various end markets, with a projected sales growth of 1-3% for fiscal 2024. The company has gained 39.3% in the past year [11] - Chart Industries (GTLS): Anticipated to benefit from a record backlog and strength in key markets, with shares gaining 15.8% in the past year [12] - Ingersoll Rand (IR): Positioned to benefit from a solid product portfolio and increased orders, with shares gaining 63.5% in the past year [13] - RBC Bearings (RBC): Expected to gain from strength in the Aerospace segment, with shares increasing by 6.8% in the past year [14]