Core Insights - The article emphasizes the importance of efficiency levels in assessing a company's potential for profit generation, with a high efficiency level correlating positively with price performance [1] Efficiency Ratios - Receivables Turnover measures a company's ability to extend credit and collect debts, with a high ratio indicating effective collection practices [2] - Asset Utilization indicates how well a company converts its assets into sales, with a higher ratio suggesting greater efficiency [3] - Inventory Turnover assesses a company's ability to manage inventory relative to its cost of goods sold, where a high ratio indicates effective inventory management [4] - Operating Margin reflects a company's control over operating expenses, with a higher margin indicating better efficiency compared to peers [5] Screening Criteria - The screening process included a favorable Zacks Rank of 1 (Strong Buy) alongside the efficiency ratios to enhance profitability [6] - The criteria narrowed down over 7,906 stocks to nine, focusing on those with efficiency ratios above industry averages [7] Top Stocks Identified - Flexsteel Industries (FLXS) leads the list with a strong performance in profitability ratios and an average four-quarter earnings surprise of 53.10% [8][9] - Proto Labs (PRLB) is noted for its solid earnings surprises and efficiency, with an average four-quarter earnings surprise of 22.1% [8][10] - TechnipFMC (FTI) is recognized for its efficiency in the energy sector, boasting an average four-quarter earnings surprise of 15.9% [8][11] - Telefonica Brasil (VIV) also meets the screening criteria, with an average four-quarter earnings surprise of 7.7% [8][12]

Industry Overview - The U.S. manufacturing sector is showing signs of a solid rebound after struggling for the past three years, with rising demand boosting manufacturing activity despite concerns over high prices and a shrinking labor market [1] - U.S. industrial production increased by 0.7% in January, surpassing analysts' expectations of a 0.4% rise, following a 0.2% gain in December, indicating a recovery in manufacturing activity [3][11] - The ISM Manufacturing Index reported a PMI reading of 52.6 in January, up from 47.9 in December, marking the strongest reading since 2022 and indicating sector growth for the first time in a year [5] Economic Indicators - The New Orders Index surged by 9.7 percentage points to 57.1% in January, reaching its highest level since February 2022, driven by increased demand for manufactured products [6] - Inflation has eased over the past two quarters, and the Federal Reserve cut interest rates by 75 basis points last year, which has helped reduce borrowing costs and price pressures, thereby driving demand [7] - The Federal Reserve is maintaining interest rates in the range of 3.5% to 3.75% and is open to further rate cuts depending on inflation trends, with expectations of inflation slowing to 2.4% by the end of 2026 [8] Stock Recommendations - Proto Labs, Inc. (PRLB) is a quick-turn manufacturer of custom parts with an expected earnings growth of 8.4% for the current year and a Zacks Rank of 1 [9] - RBC Bearings Incorporated (RBC) specializes in engineered bearings and precision components, with an expected earnings growth of 23.6% for the current year and a Zacks Rank of 1 [12] - Helios Technologies, Inc. (HLIO) develops hydraulic and electronic control solutions, with an expected earnings growth of 17.2% for the current year and a Zacks Rank of 2 [13] - Trimble Inc. (TRMB) provides technology solutions for various industries, with an expected earnings growth of 12.8% for the current year and a Zacks Rank of 2 [15]

Core Insights - CNH Industrial reported fourth-quarter 2025 adjusted earnings per share (EPS) of 19 cents, an increase from 15 cents in the prior-year quarter, surpassing the Zacks Consensus Estimate of 11 cents [1] - Consolidated revenues rose 5.8% year over year to $5.16 billion, exceeding the Zacks Consensus Estimate of $5.02 billion [1] Segmental Performance - Agriculture segment net sales increased 5% year over year to $3.6 billion, driven by favorable price realization and positive foreign exchange impacts, beating the estimate of $3.41 billion [2] - Adjusted EBIT for the Agriculture segment was $233 million, down 5% year over year due to lower volumes and higher costs, but still above the estimate of $172.6 million; adjusted EBIT margin decreased to 6.5% from 7.2% [2] - Construction segment sales rose 19% year over year to $853 million, attributed to higher volume and favorable price realization in North America, surpassing the estimate of $810.3 million [3] - Adjusted EBIT for the Construction segment was $5 million, down 72% year over year due to increased production costs, with adjusted EBIT margin decreasing to 0.6% from 2.5% [3] - Financial Services segment revenues fell 6% to $700 million, missing the estimate of $770.4 million, while net income increased from $92 million to $109 million year over year [4] Financial Details - As of December 31, 2025, CNH Industrial had cash and cash equivalents of $2.58 billion, down from $3.19 billion a year earlier [5] - Total debt was $26.76 billion, a slight decrease from $26.88 billion as of December 31, 2024 [5] - Net cash provided by operating activities was $945 million, compared to $1.69 billion in the prior year [5] - Free cash outflow from industrial activities was $817 million, slightly improved from $848 million in the fourth quarter of 2024 [5] 2026 Guidance - For 2026, Agriculture sales are expected to decrease and remain flat at 5% year over year, with adjusted EBIT margin projected between 4.5-5.5% [6] - Construction segment sales are expected to remain flat year over year, with adjusted EBIT margin anticipated in the range of 1-2% [6] - Free cash flow from industrial activities is expected to be between $150-$350 million, with adjusted EPS projected between 35 cents and 45 cents, down from 55 cents in 2025 [7] Zacks Rank & Key Picks - CNH currently holds a Zacks Rank 4 (Sell) [8] - Other better-ranked stocks in the industrial product space include Kawasaki Heavy Industries, Kennametal, and Proto Labs, each with a Zacks Rank 1 (Strong Buy) [10]

The Industrial Products group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Kubota Corp. (KUBTY) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? Let's take a closer look at the stock's year-to-date performance to find out.Kubota Corp. is one of 179 individual stocks in the Industrial Products sector. Collectively, these companies sit at #7 in the Za ...

Group 1: Allied Gold Corporation - Allied Gold Corporation operates a portfolio of producing assets and development projects primarily in Cote d'Ivoire, Mali, and Ethiopia [1] - The company has a Zacks Rank of 1 (Strong Buy) and its current year earnings estimate increased by 26.8% over the last 60 days [1] - Allied Gold's shares gained 87.6% over the last three months, significantly outperforming the S&P 500's gain of 1.2% [2] Group 2: Proto Labs - Proto Labs is an online and technology-enabled quick-turn manufacturer of custom parts for prototyping and short-run production [2] - The company also holds a Zacks Rank of 1 and its current year earnings estimate increased by 6.9% over the last 60 days [2] - Proto Labs' shares increased by 34.7% over the last three months, again outperforming the S&P 500's gain of 1.2% [3] Group 3: RBC Bearings - RBC Bearings manufactures and distributes engineered bearings and precision components [3] - The company has a Zacks Rank of 1 and its current year earnings estimate rose by 3.9% over the last 60 days [3] - RBC Bearings' shares gained 23.6% over the last three months, surpassing the S&P 500's gain of 1.2% [4]

Market Performance - Wall Street has shown mixed performance in 2026, with small-cap stocks outperforming large-cap stocks; S&P 500 gained 1.1%, Dow Jones rose 3.6%, Nasdaq Composite slipped 0.9%, while Russell 2000 surged 6.5% [1] Macro Environment - Major developments impacting markets include heightened geopolitical tensions, fluctuations in the U.S. dollar, disruptions from a winter storm, and the nomination of Kevin Warsh as the next Federal Reserve chair [2] Geopolitical Risks - Geopolitical uncertainty has increased due to U.S. actions involving Venezuela, renewed tensions with Iran, and policy disputes with European allies, benefiting small-cap stocks that generate most revenues domestically [3] Currency Impact - The U.S. dollar strengthened following Warsh's nomination, which supports smaller companies with limited foreign exposure and reduces currency translation risks, while large-cap companies may face challenges [4] Earnings Outlook - Small-cap earnings are recovering, with the S&P SmallCap 600 index projected to return to positive growth in 2025, expecting double-digit earnings expansion over the next two years [5] Sector Performance - The finance sector of the small-cap index S&P 600 is expected to see earnings growth of 26.7% in Q4 2025 and 33.9% in Q1 2026, driven by revenue growth of 9.6% and 8.2% respectively [7] - The aerospace sector is projected to log earnings growth of 48.7% in Q4 2025 and 40.1% in Q1 2026, supported by revenue increases of 17% and 12.3% respectively [11] - The industrials sector is expected to record earnings growth of 9.5% in Q4 2025 and 9% in Q1 2026, with revenue growth projected at 5.7% and 3.6% respectively [13] Investment Opportunities - Invesco S&P SmallCap Financials ETF (PSCF) is up 4% this year, while Peoples Bancorp Inc (PEBO) has increased by 13.4% [8] - U.S. Global Technology and Aerospace & Defense ETF (WAR) is up 4.8%, and Astronics (ATRO) has risen by 35.3% [12] - Invesco S&P SmallCap Industrials ETF (PSCI) is up 15.3%, and Proto Labs (PRLB) has increased by 30.8% [14]

Core Insights - The company reported a record fourth-quarter revenue of $136.5 million, marking an 11% year-over-year increase in constant currencies, and the first sequential revenue growth in Q4 since 2017 [2][3][6] - The CEO highlighted strong demand in CNC machining and sheet metal, contributing to double-digit growth, while U.S. CNC revenue grew 25% year-over-year [7][8] - The company ended 2025 with a healthy cash position of $142.4 million and zero debt, while guiding for 2026 revenue growth of 6% to 8% [5][20] Financial Performance - Fourth-quarter non-GAAP gross margin was 44.8%, up 140 basis points year-over-year, driven by higher volume and improved margins in U.S. factories [9] - Full-year 2025 revenue reached $533.1 million, a 5.7% increase in constant currencies, with U.S. revenue up 9.1% while Europe declined 7% [10] - Non-GAAP operating expenses for 2025 were $193.3 million, or 36.3% of revenue, slightly above the previous year [12] Demand Drivers - Exceptional demand for CNC machining and sheet metal was noted, with U.S. CNC revenue growing 35% in Q4 and 25% for the year [6][8] - Injection molding and plastic 3D printing experienced modest declines, attributed to weakness in medical devices and lower prototyping demand [8] Strategic Initiatives - The company is focusing on a strategy to serve customers from prototype through production, anchored by four pillars aimed at enhancing customer experience and operational efficiency [13][16] - Plans for a reorganization of the technology group and the launch of "ProDesk" as a customer-facing experience were outlined, aimed at simplifying processes and accelerating innovation [15][18] 2026 Outlook - Management expects full-year 2026 GAAP revenue growth of 6% to 8%, with first-quarter revenue guidance of $130 million to $138 million [20] - The company plans to reallocate resources to fund transformation efforts without broadly expanding spending, indicating a focus on cost management [21]

Industry Overview - 3D Printing, also known as additive manufacturing, has revolutionized product design and production since its introduction in the 1980s, allowing for unmatched precision, customization, and efficiency [1] - The technology has evolved from a prototyping technique to a scalable manufacturing solution, minimizing waste and enabling complex designs that traditional methods cannot achieve [2] Adoption and Benefits - Companies are increasingly adopting 3D Printing for rapid prototyping and on-demand production due to its cost-effectiveness, customization, precision, and sustainability compared to traditional manufacturing [3] - Localized production shortens supply chains and reduces transportation costs, while on-demand manufacturing eliminates the need for large inventories, which is particularly beneficial for industries with seasonal demand [3] Key Sectors - Adoption of 3D Printing is accelerating in key sectors such as healthcare, aerospace, automotive, and consumer goods, with applications ranging from lightweight aircraft components to patient-specific medical devices [4] Market Leadership - North America leads the 3D Printing market with over 35% share, driven by strong R&D investment, government initiatives, and advanced manufacturing infrastructure, while the Asia-Pacific region is rapidly expanding its adoption [5] Investment Opportunities - The 3D Printing sector presents compelling growth opportunities for investors, supported by an expanding addressable market and a strong innovation pipeline [5] - High-potential stocks in the 3D Printing space include NVIDIA (NVDA), AMETEK (AME), and Carpenter Technology (CRS) [6] Company Innovations - NVIDIA has significantly influenced the 3D Printing industry through its advanced AI and GPU technologies, enhancing efficiency and accuracy in manufacturing [7] - Notable collaborations include NVIDIA's partnership with HP's 3D Printing division, which utilizes NVIDIA's AI tool to optimize production processes [8] - NVIDIA is also backing startups like Freeform, which aims to create an AI-native, autonomous metal 3D printing factory [9] AMETEK's Capabilities - AMETEK is a leading producer of high-performance metal powders for additive manufacturing, offering a range of alloys tailored for various processes [13] - The company recently acquired Faro Technologies for $920 million, enhancing its precision scanning capabilities [15] ATI's Additive Manufacturing - ATI provides a full range of capabilities in the additive supply chain, including expertise in Electron Beam Melting and Direct Metal Laser Melting [16] - The company has commissioned a state-of-the-art facility for additive manufacturing, integrating design, printing, and inspection capabilities [18] Carpenter Technology's Additive Business - Carpenter Technology has built its additive capabilities through strategic acquisitions and operates an Emerging Technology Center for atomizing specialty alloys into metal powder [19] - The Carpenter Additive business is recognized for its versatile production of spherical, gas-atomized metal powders tailored for additive manufacturing [20]

Company Performance - Powell Industries (POWL) has gained approximately 51.8% year-to-date, significantly outperforming the average return of 7.1% for Industrial Products companies [4] - The Zacks Consensus Estimate for Powell Industries' full-year earnings has increased by 2.4% over the past 90 days, indicating improved analyst sentiment and a stronger earnings outlook [3] Industry Comparison - Powell Industries belongs to the Manufacturing - Electronics industry, which currently ranks 54 in the Zacks Industry Rank, with stocks in this group gaining about 2% year-to-date, showcasing POWL's superior performance [5] - Another notable performer in the Industrial Products sector is Proto Labs (PRLB), which has increased by 35.7% year-to-date and belongs to the Rubber - Plastics industry, currently ranked 38, with a year-to-date gain of 4.2% [4][6] Zacks Rank - Powell Industries holds a Zacks Rank of 2 (Buy), suggesting a favorable outlook for the stock in the near term [3] - Proto Labs has a higher Zacks Rank of 1 (Strong Buy), reflecting strong analyst confidence in its performance [5]

Core Insights - The efficiency ratio serves as an indicator of a company's financial health, reflecting how effectively it utilizes its assets and liabilities internally [1] - Companies that have passed the screening process for efficiency ratios include Owlet (OWLT), Proto Labs (PRLB), and Las Vegas Sands (LVS) [1][8] Efficiency Ratios to Consider - **Receivables Turnover**: This ratio measures a company's ability to extend credit and collect debts, with a higher ratio indicating better performance [2] - **Asset Utilization**: This ratio assesses how well a company converts its assets into sales, with higher values suggesting greater efficiency [3] - **Inventory Turnover**: This ratio indicates a company's ability to manage inventory relative to its cost of goods sold, with higher values reflecting better inventory management [4] - **Operating Margin**: This ratio measures the efficiency of a company in controlling operating expenses, with higher values indicating better expense management [5] Screening Criteria - The screening process utilized efficiency ratios that are above industry averages, narrowing down a universe of over 7,906 stocks to 14 potential candidates [7] - A favorable Zacks Rank of 1 (Strong Buy) was also included in the screening criteria to enhance profitability [6] Top Stocks Identified - **Owlet (OWLT)**: Achieved a positive earnings surprise of 87.8% over the last four quarters, indicating strong performance [9] - **Proto Labs (PRLB)**: Known for its quick-turn custom parts manufacturing, with an average earnings surprise of 18.6% [10] - **Las Vegas Sands (LVS)**: Operates integrated resorts in the U.S. and Asia, with a 14.5% average earnings surprise [11]