Machinery is profitable

Despite the European sovereign debt crisis and growing concerns about China, recent independent surveys have revealed that business executives are showing greater confidence in the U.S. economic outlook.

This increasing business confidence can be attributed to better-than-expected manufacturing results, greater investment in U.S. manufacturing plants, and data that indicate U.S inflation is in check.

What sectors can drive economic rebound and employment — and are they good prospective investments? Many high-tech companies are remarkable innovators, but the majority of them employ small numbers of people relative to the markets they serve: for example, Facebook employs about 3,000 people to serve a customer base of more than 800 million.

It is the interaction among innovation, markets and manufacturing that drives competitiveness, growth and employment. Therefore, let’s examine one of the industry groups known to be strong during the recovery phase of economic cycles.

The Diversified Machinery industry group includes companies that manufacture industrial machinery for a broad array of markets. An industry can often lead or lag the market, but even if you have an idea about which market sectors may be ripe for positive investments, how do you select among the stocks in that sector?

Our SmarTrend trading system has identified several stocks in this industry as being in Uptrends. IR (Ingersoll-Rand PLC) designs, manufactures, sells and services a diverse portfolio of industrial and commercial products in the United States and internationally. The Uptrend alert for IR was identified about three months ago, on December 1, 2011, at $33.18. In late February, IR had a return of about 22%, trading at a price of $40.48.

TAYD (Taylor Devices, Inc.; see chart) designs, develops, manufactures, and markets shock absorption, rate control, and energy storage devices for use in various types of machinery, equipment, and structures. The company’s product line includes seismic dampers that dull the effects of earthquake tremors on structures, and compact shock absorbers for primary use in the defence, aerospace, and commercial industries. TAYD is in an Uptrend called by SmarTrend on January 5, 2012 at $7.83. With a price of $10.80 in late February, this stock has increased about 37% in the approximate two-month period from when the Uptrend alert was issued.

CFX (Colfax Corporation) designs, manufactures, installs, maintains, and sells gas-, fluid-handling and fabrication technology products and services to commercial and governmental customers worldwide. It serves commercial marine, oil and gas, power generation, defence, and general industrial sectors. SmarTrend shows shares of CFX in an Uptrend from an alert issued on January 6, 2012 at $31.36. In late February, CFX was trading at $34.95, representing an increase of approximately 11%.

A more recent SmarTrend Uptrend was issued on January 24, 2012 for CMCO (Columbus MacKinnon Corporation), which designs, manufactures, and markets material handling products for commercial and industrial end-user markets in the United States, Canada, and internationally.

The company sells its products to various industries including power generation and distribution, commercial construction, oil exploration and refining, ship building, heavy-duty trucking, agriculture, and mining.

It also sells to the entertainment industry, particularly its permanent and travelling concerts, live theatre, and sporting venues. SmarTrend issued the Uptrend when CMCO was trading at $13.83, and by late February, CMCO was trading at $17.20, showing an increase of about 24%.

As always, use a trusted trading system, such as SmarTrend, to start or research stocks — and be sure to conduct your own due diligence prior to investing.

Chip Brian is Founder and CEO of SmarTrend^®. If you wish to follow any of these stocks, and find out when their trend changes direction, try a 14-day free trial at www.mysmartrend.com.