Rexnord, Kennametal, Heico: Industrial Stocks Poised To Gain As The Economy Recovers

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Trefis
CAT: Caterpillar logo
CAT
Caterpillar

Our theme Industrial Stocks To Play The Recovery – which includes a range of industrial companies that have strong fundamentals, but have underperformed the market – is down by about -6.7% year-to-date, versus a 3.4% gain for the S&P 500. The theme has returned 45% since 2017, compared to about 25% for the S&P 500. As the products and services that these companies provide are integral to the broader economy, the current pandemic is only likely to be a temporary setback. As the economy improves, demand is likely to rebound sharply benefiting these stocks. Within the theme, FTI Consulting (FCN) has seen the lowest relative decline, falling by 2% year-to-date. In comparison, Kennametal (KMT) has fared the worst falling by about -16%. Below is a quick overview of some of the stocks and how they have fared.

FTI Consulting (FCN) one of the largest global management consulting firms has seen its stock decline by about -2% year-to-date. The stock is up 150% since early 2018.

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FCN

Zebra Technologies (ZBRA)  a company that manufactures and sells marking, tracking, and computer printing technologies is down by about -2% year-to-date. The stock is up 140% since early 2018.

ABM Industries (ABM) a company that provides facility management services ranging from electrical and lighting management, HVAC services, janitorial services, and landscaping is down by about -3% year-to-date. The stock has gained about 1.6% since 2018.

Heico Corporation (HEI) is an aerospace and electronics company that focuses on relatively niche markets. The stock is down by about -5% year-to-date. The stock is up by about 80% since 2018.

Rexnord Corporation (RXN) an industrial company that manufactures drives, gears, and bearings has seen its stock decline by about -7% year-to-date. The stock is up by about 13% since early 2018.

PRA Health Sciences (PRAH), a contract research organization, has seen its stock decline by about -7% this year. The stock is up by about 13% since early 2018.

Kennametal (KMT)  a tooling and industrial materials supplier, has seen its stock decline by about -16% year-to-date. The stock has lost about -34% since early 2018.

What if you’re looking for a more balanced portfolio instead? Here’s a top-quality portfolio to outperform the market, with over 100% return since 2016, versus 55% for the S&P 500, Comprised of companies with strong revenue growth, healthy profits, lots of cash, and low risk. It has outperformed the broader market year after year, consistently.

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