The Zacks Analyst Blog Highlights: AGCO, Century Aluminum, Mueller Industries, UFP Technologies And Zebra Technologies

For Immediate Release

Chicago, IL – September 19, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: AGCO Corporation (NYSE:AGCO) , Century Aluminum Company (NASDAQ:CENX) , Mueller Industries, Inc. (NYSE:MLI) , UFP Technologies, Inc. (NASDAQ:UFPT) and Zebra Technologies Corporation (NASDAQ:ZBRA) .

Here are highlights from Wednesday’s Analyst Blog:

U.S. Factories Pick Up, Manufacturing Recession Overstated

Economic output, quite alarmingly, shrank for two straight quarters this year. Many market pundits started to believe that manufacturing is in recession. However, industrial output rebounded in August and registered its largest increase in a year. Banking on such better-than-expected manufacturing numbers, top manufacturers are well poised to ramp up profits.

Is a Manufacturing Recession on the Anvil?

Manufacturers added a paltry 3,000 jobs in August, a tell-tale sign that factories were affected by the trade war and slowdown in global economic growth. Mark Hamrick, a senior economic analyst at Bankrate.com, added that “just over a year ago, manufacturing was the star pupil sector of the U.S. economy, producing more jobs than had been expected; it’s turned into a problem child, and it's not necessarily a stellar performer in employment data.”

To make things worse, the Federal Reserve data showed that manufacturing sector contracted in both the January through March and April-through-June periods. What’s more, the Institute of Supply Management, an association of purchasing managers, showed that new factory orders fell sharply last month.

Of course, such a discouraging trend raises concerns about the overall strength of the economy and not to mention President Trump’s re-election chances. After all, Trump’s main objective was to revive American manufacturing. He had signed steep tax cuts into law only to spur investment in the manufacturing sector.

Industrial Production Jumps — A Welcome Sign of Resilience

Things, however, are looking up for the manufacturing sector. And why not? The Federal Reserve recently said that industrial production, a measure of factory, mining and utility output, increased at a seasonally adjusted rate of 0.6% in August compared to the prior month. The reading was well above analysts’ expectation of a 0.2% increase.

The Fed further added that output at U.S. factories increased an average 0.2% a month over the past four months after declining an average 0.5% a month during the first four months of the year. The mining index, which includes oil and natural gas extraction, also went up 1.4% in August after dropping 1.5% in July as Hurricane Barry affected oil rigs in the Gulf of Mexico. By the way, output in the volatile mining sector jumped 5.1% from a year ago.

Adding to the positives was an uptick in utility production. Capacity utilization increased to 77.9% in August, its highest level since March. Needless to say, the industrial output and capacity utilization report runs counter to earlier signs of weakness in the manufacturing sector.

5 Winners

As the key measure of U.S. factory, mining and utility output surpassed expectations, industrial stocks in particular are expected to gain. We have, thus, selected five such stocks that flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy).

AGCO Corporationmanufactures and distributes agricultural equipment and related replacement parts. The company has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved up 3.3% in the last 60 days. The company’s expected earnings growth rate for the current year is 30.6% against the Zacks Investment Research

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Written By: Zacks Investment Research