However hard the market slams a stock, there's always the chance it'll come bouncing right back. We'll consult our Motley Fool CAPS community to find shares on the rebound, examining one specific sector of the economy in search of companies with rising CAPS ratings.
There are 172 stocks listed under "industrial" in the CAPS screener, and more than a handful of them carry well-respected four- and five-star ratings. Those accolades mean our 170,000 CAPS members are confident that these stocks will beat the market in the months ahead. Let's see what members are saying about the ones below:
52-Week Price Change
5-Year Growth Rate
Source: Motley Fool CAPS; Yahoo! Finance.
The markets have been on a roller-coaster ride lately, but with the S&P 500 up about 19% over last year and the economy looking better, it's not so surprising to learn that CAPS industrial stocks have done even better, rising 30% on average during that same time span. So let's take a closer look at why investors think some of these companies won't be jumping from the frying pan into the fire now that the markets are roiled again.
Some spring in its step
While the new Chinese era is probably not done just yet -- although the government might have to cut rates to jump-start growth again -- other markets may provide the opportunities China presented just a few years ago. India is one of them. There are some very good arguments as to why India is no China, but that doesn't mean there aren't some very good investments in the subcontinent that could grow like they were bubble stocks from their neighboring emerging market.
Diversified manufacturer 3M, in fact, is benefiting from business there, shaking its moneymaker to achieve 30% growth rates. But showing that China isn't done yet either, 3M saw revenues jump 27% there, and Brazil rounded out the top three with 25% growth. The BRICs still have their mojo, yet Caterpillar's
Earlier this year, 3M said it was looking to achieve 7% to 8% organic growth in an effort to stay ahead of rivals like Dupont
CAPS member SeanFlynn1 says 3M is one company you can essentially "set and forget" in your portfolio:
Another stock that you can safely hold forever. Everything that 3M does, it does very well. It has plenty of cash to keep raising its dividend annually, plenty of room to grow the business, and once growth slows the yield will only continue to increase. You can't lose long term with 3M.
A heavy load to carry
While Manitowoc trades 50% higher than it did a year ago, its recent quarterly earnings cast doubts on whether it will continue driving north and indeed increased worries about its viability. It has a heavy debt load it needs to contend with, much worse than more nimble competitors like Terex
I don't think this spells the end for the diversified manufacturer, though. The refinancing strengthens its capital structure and gives it lower payments while extending the debt's maturities. Even with a loss this quarter, both its crane business and food service division saw revenue grow 7%. The crane segment is expected to grow sales in the low double-digit range this year, while food service should be in the high single digits. Both segments are forecast to experience improving margins.
With 97% of the more than 1,800 CAPS members weighing in on Manitowoc believing it will outperform the broad market averages, they're seeing a company that can lift itself above this one-quarter setback. You can give us your thoughts on the Manitowoc CAPS page.
A vital statistic
It's not that Westport Innovations is seen as having any particular issues on the horizon causing its stock to peel back from recent highs, but rather the natural gas engine maker had become pricey relative to the competition. Analysts noted it was trading at 3.7 times sales and an EV/EBITDA multiple of 43, while peers like Fuel Systems Solutions
The ball's in your court
There are many factors that go into whether a stock is a buy or sell, so it pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made all from a stock's CAPS page. Head over to CAPS today and share your thoughts with other investor analysts on whether you think these stocks are ready to bound higher.
3M is a Motley Fool Inside Value recommendation. Westport Innovations is a Motley Fool Stock Advisor pick. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.