Good news for U.S. factories: Orders for motor vehicles and aircrafts have increased in July to its highest levels in four months, negating the drop in orders for business equipment.

In total, U.S factories orders increased by 2.5%, beating analyst expectations. This is according to Bloomberg, which writes, "Factory orders were projected to rise 2 percent, following a previously reported drop of 0.8 percent in June, according to the Bloomberg survey of 59 economists. Estimates ranged from gains of 0.6 percent to 3.5 percent."

"Demand for durable goods, which make up just over half of total factory demand, rose 4.1 percent," according to today's Institute for Supply Management report. Non-durable goods rose 1%.

But how good is this good news? The earthquake in Japan slowed down manufacturing, and July's stellar increase could simply be the industry "catching up" with the halted demand.

In fact, without the demand for planes and automobiles, factories orders overall fell "0.9 percent, less than estimated last week, after rising 0.8 percent the prior month."

Weak demand and an uncertain future means even fewer orders are expected. Meanwhile, big-ticket orders can only sustain the industry for so long.

According to Bloomberg, business activity in August expanded at a slower pace while the economy's "business barometer" is reportedly on the fence (53 of 100) of expansion and contraction, and expected to dip even closer toward the danger zone (below 50).

Interested in keeping tabs on the future of factories? To help you follow the industry, we list below this year's most profitable large cap (over $10B) industrial goods stocks. (Click here to access free, interactive tools to analyze these ideas.)

1. Precision Castparts (NYSE: PCP): Metal Fabrication Industry. Market cap of $23.60B. In the past year, the company gained 36.69% in market value. The stock has had a couple of great days, gaining 5.53% over the last week.

2. Caterpillar (NYSE: CAT): Farm & Construction Machinery Industry. Market cap of $58.79B. In the past year, the company gained 36% in market value. The stock has had a couple of great days, gaining 6.56% over the last week.

3. Fluor (NYSE: FLR): Heavy Construction Industry. Market cap of $10.55B. In the past year, the company gained 31.8% in market value. The stock has had a couple of great days, gaining 5.47% over the last week.

4. Goodrich (NYSE: GR): Aerospace/Defense Products & Services Industry. Market cap of $11.15B. In the past year, the company gained 26.32% in market value. The stock has gained 26.32% over the last year.

5. Deere & Company (NYSE: DE): Farm & Construction Machinery Industry. Market cap of $33.92B. In the past year, the company gained 23.6% in market value. The stock has had a couple of great days, gaining 7.62% over the last week.

6. Dover (NYSE: DOV): Diversified Machinery Industry. Market cap of $10.70B. In the past year, the company gained 23.01% in market value. The stock has had a couple of great days, gaining 5.85% over the last week.

7. Parker Hannifin (NYSE: PH): Industrial Equipment & Components Industry. Market cap of $11.91B. In the past year, the company gained 20.04% in market value. The stock has had a couple of great days, gaining 8.82% over the last week.

8. Honeywell International (NYSE: HON): Aerospace/Defense Products & Services Industry. Market cap of $37.41B. In the past year, the company gained 19.91% in market value. The stock has had a couple of great days, gaining 6.67% over the last week.

9. Eaton (NYSE: ETN): Industrial Electrical Equipment Industry. Market cap of $14.65B. In the past year, the company gained 17.83% in market value. Offers a good dividend, and appears to have good liquidity to back it up -- dividend yield at 3.17%, current ratio at 1.74, and quick ratio at 1.22. The stock has had a couple of great days, gaining 5.53% over the last week.

10. Cummins (NYSE: CMI): Diversified Machinery Industry. Market cap of $18.09B. In the past year, the company gained 17.74% in market value. The stock has had a couple of great days, gaining 7.32% over the last week.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.


Kapitall's Becca Lipman does not own any of the shares mentioned above. Data sourced from Finviz.