Got $1,000? 2 Top Industrial Stocks to Buy for the Long Term
The industrial sector, from a big-picture perspective, sells products to other companies. There are many iconic names in the space, like Stanley Black & Decker (NYSE: SWK) and Rockwell Automation (NYSE: ROK), that have seen their shares fall of late. There are good reasons for concern, but this cyclical industry often provides the best investment opportunities when Wall Street is in a dour mood. Here's why you might want to hold your nose and buy these two stocks if you have some cash sitting around.
Stanley Black & Decker's stock has been down around 35% so far in 2022, way worse than the S&P 500 Index's roughly 16% decline. Vanguard Industrials ETF, a rough proxy for the industrial sector, has been off around 15%. Stanley Black & Decker's main businesses are making tools and fasteners, both of which are products that its customers need to do their jobs. While demand will ebb and flow with economic activity, it is highly unlikely to fall to zero.
In the first quarter, Stanley trimmed its full-year 2022 adjusted earnings guidance range to $9.50 to $10.50 per share, down from a range of $12.00 to $12.50. It followed that up in the second quarter by trimming guidance again, this time to a range of $5.00 to $6.00 per share. Investors are understandably worried, noting that supply chain issues and inflationary cost pressures were big issues. In the latter half of the second quarter, sales also started to slow down, reflecting the industrial company's sensitivity to economic cycles. However, the company has a market-leading position in tools with brands such as Stanley, Black & Decker, DeWalt, and MAC Tools. The business is robust, even if there is weakness over shorter periods.
Source Fool.com
