The resurgence of COVID-19 cases and the inflationary environment have been concerns for investors looking to benefit from the economic recovery. However, the Fed’s unabated near-zero interest policy, a rapid vaccination program, and supportive government policies have boosted the industrial sector’s growth.
Furthermore, President Biden's $1 trillion bipartisan infrastructure bill proposal, which includes $550 billion in new spending for building roads, rails, and bridges, among other infrastructure areas, is expected to help the sector grow significantly in the coming months. Senate Majority Leader Chuck Schumer said that he aims to pass the bill by the end of October.
Given this backdrop, we think the prices of shares of fundamentally strong industrial companies Nordson Corporation (NDSN), Crane Co. (CR), Culp, Inc. (CULP), and Core Molding Technologies, Inc. (CMT) could soar this month and beyond. So, it could be wise to scoop up their shares now.
Click here to check out our Industrial Sector Report for 2021
Nordson Corporation (NDSN)
NDSN engineers, manufactures, and markets products and systems to dispense, apply, and control adhesives, coatings, polymers, sealants, biomaterials, and other fluids worldwide. It operates through two segments: Industrial Precision Solutions and Advanced Technology Solutions.
On August 24, NDSN signed an agreement to acquire NDC Technologies, a leading global provider of precision measurement solutions for in-line manufacturing process control, from Spectris plc. The acquisition expands NDSN’s test and inspection platform into new end markets and adjacent technologies.
NDSN’s net sales surged 20% year-over-year to $647 million in its fiscal third quarter, ended July 31, 2021. The company’s adjusted operating profit grew 57% year-over-year to $188 million, while its adjusted net income came in at $142 million, representing a 71% year-over-year increase. Also, its adjusted EPS was $2.42, up 70% year-over-year.
For its fiscal year 2021, analysts expect NDSN’s EPS and revenue to increase 45.1% and 12.1%, respectively, year-over-year to $7.95 and $2.38 billion. In addition, it surpassed the Street’s EPS estimates in each of the trailing four quarters.
NDSN’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
It has an A grade for Sentiment and Quality, and a B grade for Growth and Stability. Click here to access the additional POWR Ratings for NDSN (Value and Momentum). NDSN is ranked #3 of 80 stocks in the B-rated Industrial - Machinery industry
Crane Co. (CR)
CR manufactures and sells engineered industrial products in the United States, Canada, United Kingdom, Continental Europe, and internationally. The Stamford, Conn., company operates through four segments: Fluid Handling; Payment & Merchandising Technologies; Aerospace & Electronics; and Engineered Materials.
On July 26, 2021, Max Mitchell, CR’s President and CEO, said, “I am confident that we remain on a path to generate substantial and sustainable value for all of our stakeholders by continuing to drive above-market growth, paired with ongoing active portfolio management."
CR’s net sales surged 24% year-over-year to $796.40 million in its fiscal second quarter, ended June 30, 2021. The company’s adjusted operating profit grew 140.8% year-over-year to $139.90 million, while its adjusted net income came in at $108.50 million, representing a 207.4% year-over-year increase. Also, its adjusted EPS was $1.83, up 207.4% year-over-year.
CR’s EPS is expected to be $6.12 in its fiscal 2021, representing a 59.4% year-over-year increase. In addition, it surpassed the consensus EPS estimates in three of the trailing four quarters. The company’s revenue is expected to increase 7.7% year-over-year to $3.35 billion in its fiscal year 2022.
CR’s POWR Ratings reflect solid prospects. The company has an overall A rating, which translates to a Strong Buy in our proprietary rating system. It has a B grade for Value, Quality, and Sentiment.
Click here to see the additional POWR Ratings for CR (Growth, Stability, and Momentum). CR is ranked #2 in the Industrial - Machinery industry.
Culp, Inc. (CULP)
High Point, N.C.-based CULP manufactures, sources, markets, and sells mattress fabrics, sewn covers, and cut and sewn kits for mattresses, foundations, and other bedding products in North America, the Far East, Asia, and internationally. The company operates in two segments, Mattress Fabrics and Upholstery Fabrics.
On September 1, Iv Culp, President and CEO of CULP, said, “With our diversified manufacturing and sourcing capabilities, along with our innovative products and digital design strategies, we expect to have additional opportunities to capture market share with new and existing customers.”
CULP’s net sales surged 28.8% year-over-year to $83 million in its fiscal first quarter, ended August 1, 2021. The company’s income from operations grew 76.2% year-over-year to $3.30 million, while its net income came in at $2.30 million, compared to a $2.70 million loss in the prior-year period. Also, its EPS came in at $0.18, compared to a $0.22 loss per share in the year-ago period.
Analysts expect CULP’s EPS and revenue to increase 23.7% and 10.3%, respectively, year-over-year to $0.73 and $330.66 million in fiscal 2022. In addition, it surpassed the Street’s EPS estimates in each of the trailing four quarters.
CULP’s POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to a Buy in our proprietary rating system.
The stock has a B grade for Growth, Value, Momentum, and Sentiment. Within the A-rated Industrial - Textiles industry, CULP is ranked #3 of 5 stocks. Click here to see CULP’s ratings for Stability and Quality as well.
Core Molding Technologies, Inc. (CMT)
CMT in Columbus, Ohio, engages in the molding of thermoplastic and thermoset structural products. The company offers a range of manufacturing processes that include compression molding of sheet molding compounds, bulk molding compounds, resin transfer molding, and liquid molding of dicyclopentadiene. It serves various markets, including medium- and heavy-duty trucks, marine, automotive, agriculture, and construction.
CMT’s net sales surged 112.8% year-over-year to $80.50 million in its fiscal second quarter, ended June 30, 2021. The company’s operating income grew 271% year-over-year to $11.50 million, while its net income was $7.50 million, representing a 31.6% year-over-year increase. Also, its EPS was $0.89, up 29% year-over-year.
It’s no surprise that CMT has an overall A rating, which equates to a Strong Buy in our POWR Rating system. In addition, the stock has an A grade for Growth and Value, and a B grade for Sentiment and Quality.
Click here to see CMT’s ratings for Stability and Momentum also. In addition, CMT is ranked #3 of 43 stocks in the B-rated Industrial - Manufacturing industry.
Click here to check out our Industrial Sector Report for 2021
NDSN shares were trading at $243.57 per share on Thursday afternoon, up $5.06 (+2.12%). Year-to-date, NDSN has gained 21.97%, versus a 19.49% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles.
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