10 Industrial Stocks Poised for a Rebound
It's in this phase that long-term investors might consider stocks of their suppliers. Those are the unsung companies that provide the machine tools, parts and components that manufacturers need to produce heavy machinery, trucks, bulldozers and aircraft in anticipation that this highly cyclical industry will finally bloom again.
That's likely already in process as key industrial sector signals have been positive recently. For example, the Institute for Supply Management's March factory survey found that new orders and backlogs were still growing last month and their inventories of unsold goods weren't building, which means that any increase in demand will have to come from new production by the manufacturers.
As a result, their needs will trickle down to orders for suppliers.
What's more the Federal Reserve reported that first-quarter factory output to rise at a hefty annual rate of 10.4% and that manufacturing output moved up at an annual rate of 8.3%.