Chart o’ the Day: The Industrial Production Boom

Industrial stocks in the S&P 500 are trailing the broad market substantially this year, but they don’t deserve it. As Barron’s Ben Levisohn tells us in this weekend’s Barron’s, industrials may be about to hit their stride in the second half of the year:

With questions about economic expansion rampant, the sector dropped 1.4% during the past two weeks, and its 3.3% rise this year has trailed the S&P 500’s by nearly three percentage points.

But with the first quarter in the rearview mirror, it could be time for industrial companies to make their move—especially those that get a majority of their revenue from the U.S., says BMO Capital Market strategist Brian Belski.

For starters, those companies, which include L-3 Communications Holdings (ticker: LLL), CSX (CSX), and Parker-Hannifin (PH), trade at just 14.7 times forward earnings, well below their average of 16.7 times. At the same time, he notes that analysts now expect domestically focused industrials’ profits to climb 7.5% in 2014, up from 5.7% at the beginning of the year.

It’s actually kind of a mystery why these stocks haven’t been better so far this year. After all, industrial production is absolutely booming right now – we’re in new record-high territory for the index that tracks it. Here’s some data and a crucial chart from Scott Grannis via High Net World Magazine:

“U.S. industrial production in May increased more than expected, and there were upward revisions to prior months.

“Production is up at a 4.6% annualized rate in the six months ending May, and it hasn’t been much stronger in the current recovery. The level of industrial production is now well into new, all-time high territory.”

ip

Josh here – You can even see the Eurozone starting to make the turn higher again. This is big and should be more reflected in the S&P Industrial sector given the below-market valuations for these stocks.

Sources:

For Stocks, Good News Beyond GDP (Barron’s)

Wealth: Slow is Good (HNW Magazine)

 

What's been said:

Discussions found on the web
  1. Tyrone commented on Dec 19

    .

    ñýíêñ çà èíôó.

  2. Edwin commented on Feb 06

    .

    good!

  3. edubirdie.reviews commented on Sep 14

    … [Trackback]

    […] Info to that Topic: thereformedbroker.com/2014/06/28/chart-o-the-day-the-industrial-production-boom/ […]

  4. con rết số mấy commented on Sep 15

    … [Trackback]

    […] Read More to that Topic: thereformedbroker.com/2014/06/28/chart-o-the-day-the-industrial-production-boom/ […]

  5. Glock firearms for sale commented on Oct 14

    … [Trackback]

    […] There you can find 47718 additional Info on that Topic: thereformedbroker.com/2014/06/28/chart-o-the-day-the-industrial-production-boom/ […]

  6. Earn Fast Cash Now commented on Nov 03

    … [Trackback]

    […] There you can find 25003 additional Information to that Topic: thereformedbroker.com/2014/06/28/chart-o-the-day-the-industrial-production-boom/ […]

  7. benefits of intelligent automation commented on Nov 26

    … [Trackback]

    […] Find More on that Topic: thereformedbroker.com/2014/06/28/chart-o-the-day-the-industrial-production-boom/ […]

  8. rainbow wig commented on Nov 28

    … [Trackback]

    […] Here you will find 2655 more Info to that Topic: thereformedbroker.com/2014/06/28/chart-o-the-day-the-industrial-production-boom/ […]

  9. DevOps commented on Dec 09

    … [Trackback]

    […] Read More to that Topic: thereformedbroker.com/2014/06/28/chart-o-the-day-the-industrial-production-boom/ […]

  10. td easyweb commented on Dec 20

    … [Trackback]

    […] Find More Info here to that Topic: thereformedbroker.com/2014/06/28/chart-o-the-day-the-industrial-production-boom/ […]

  11. legit dumps shop commented on Jan 12

    … [Trackback]

    […] Find More on on that Topic: thereformedbroker.com/2014/06/28/chart-o-the-day-the-industrial-production-boom/ […]

  12. situs judi slot online terpercaya commented on Jan 25

    … [Trackback]

    […] Find More on that Topic: thereformedbroker.com/2014/06/28/chart-o-the-day-the-industrial-production-boom/ […]

  13. paito warna sgp commented on Jan 30

    … [Trackback]

    […] Read More Info here on that Topic: thereformedbroker.com/2014/06/28/chart-o-the-day-the-industrial-production-boom/ […]