4 Stocks Flying in 2016

It's been a difficult first quarter for the industrial sector, with China's growth slowing, talk of an industrial recession in the U.S., and the European Central Bank cutting interest rates to stimulate Europe's economy. Yet somehow, industrial supply companies MSC Industrial Direct Co. (NYSE:MSM), Fastenal Company (NASDAQ:FAST), and W.W. Grainger Inc. (NYSE:GWW) are up an average 16% in 2016. What's going on, and can it continue?

KMT data by YCharts.

READ THE FULL EQUITY RESEARCH ARTICLE LINKED

FedEx Corporation Stock is Flying, but Why?

Following a strong set of results from rival United Parcel Service, Inc and FedEx Corporation too reported standout results for the quarter that included the holiday season. Moreover, FedEx management emboldened investors by predicting earnings would come in toward the high end of its full-year guidance range amid impressive margin improvement in its key express segment. Let's take a closer look at the numbers and what they mean.

READ THE FULL EQUITY RESEARCH ARTICLE LINKED

3 Reasons Triumph Group, Inc Stock Could Fall

Being a Boeing Company (NYSE:BA) supplier is an uncertain business. Just ask Triumph Group, Inc. (NYSE:TGI). While Boeing has notably outperformed the S&P 500 in the past five years -- driven on by burgeoning aircraft demand -- Triumph Group has languished because of overexposure to disappointing programs. Moreover, the company faces ongoing challenges in 2016. Let's take a look at three of them before you decide to invest any money in the stock.

TGI data by YCharts.

READ THE FULL EQUITY RESEARCH ARTICLE LINKED

Union Pacific Stock Set for Recovery?

After a fearful battering in 2015, North American railroad companies have massively outperformed recently. In a sense, it's a classic "risk-on" trade as investors pile into the riskier stocks, but it could also be the market pricing in the beginning of a cyclical recovery. Let's take a closer look at Union Pacific  to see if there is anything to the latter idea.

READ THE FULL EQUITY RESEARCH ARTICLE LINKED

AgroFresh Earnings Review

The latest fourth-quarter results from produce freshness company AgroFresh Solutions Inc.  didn't produce the kind of violent move created by the third-quarter results presentation, but they were no less dramatic for other reasons.

Following a disappointing opening to life as a listed company, AgroFresh's fourth-quarter results were in line with internal guidance. It also announced, however, the departure of CEO Thomas Macphee, while President Stan Howell will step down at the end of April. Who knew keeping apples fresh could cause so much drama?

AGFS data by YCharts.

READ THE FULL EQUITY RESEARCH ARTICLE LINKED

Joy Global Reports Earnings, Caterpillar Investors Take Note

When a competitor's stock jumps 40% in a week, it's usually time to start looking at what's going on. Caterpillar's (NYSE:CAT) end markets include mining machinery, and Joy Global's (NYSE:JOY) recent surge must have had investors thinking Caterpillar could follow suit in due course. So let's take a look Joy Global's results and what they mean to the investment thesis for Caterpillar stock.

JOY data by YCharts.

READ THE FULL EQUITY RESEARCH ARTICLE LINKED

Honeywell International Investor Conference

Following its aborted bid for United Technologies Honeywell International's 2016 investor conference gave management an opportunity to redefine its strategic future to the analyst community. In the end, management outlined a mix of near- and long-term catalysts that should help investors decide what to do with the stock. Let's take a closer look at them.

READ THE FULL EQUITY RESEARCH REPORT LINKED

Deere & Company Faces Risk in 2016

Deere & Company's second-quarter earnings were a mixed bag. The company is executing well, but difficult end markets led to a full-year guidance reduction. Let's review the pressures building up on Deere and what management said on the earnings call to help alleviate investors' fears about 2016.

The bear case for Deere Investor concerns include:

READ THE FULL EQUITY RESEARCH ARTICLE LINKED

Why Delphi Automotive Stock Can Rise

If you own a stock with significant exposure to the automobile industry, you will already know that the sector has been hit hard in 2016. In a nutshell, investors have sold off auto-related stocks on fears that global auto demand is set to falter in 2016. As you can see below, auto parts makers like Delphi Automotive Plc have been beaten up. But are fears overdone?

Here are three reasons Delphi stock can rise from here.

READ THE FULL EQUITY RESEARCH ARTICLE LINKED

Rockwell Automation Stock is Still Attractive

Rockwell Automation (NYSE:ROK) lowered its full-year guidance during its first-quarter results presentation, but as I write, the stock is up 4% year-to-date and easily beating the S&P 500 and the broader industrial sector (measured by the iShares Dow Jones US Industrial ETF: IYJ in the graph below). What's going on and can it continue?

READ THE DULL EQUITY RESEARCH ARTICLE LINKED

Time to Buy Ingersoll-Rand?

It's been a pretty good year for companies exposed to the North American heating, ventilation, and air-conditioning (HVAC) market. As you can see in the chart below, the "purest" plays, Lennox International (NYSE:LII) and Ingersoll-Rand Plc (NYSE:IR), have both outperformed. Ingersoll-Rand is favored with relatively good HVAC markets, and it has a margin expansion opportunity that could drive growth in 2016. Let's take a closer look.

READ THE FULL EQUITY RESEARCH ARTICLE LINKED

Why Boeing Thinks It's Different This Time

At the recent Barclays Industrial Select Conference, The Boeing Company CEO Dennis Muilenburg argued that the aerospace industry was "differentiated" and had different growth dynamics compared to other industrial sectors. Given the industrial slowdown in the global economy, this means he sees aerospace as able to buck the trend. Is he right, or are aerospace investors heading for a disappointment in 2016?

3 reasons aerospace demand will growFocusing on commercial aerospace, you can separate Muilenburg's case into three somewhat related parts:

• Ongoing airline profitability will lead to commercial aircraft orders as the two are correlated.
• Low oil prices increase airline profitability, and airlines buy new planes for more reasons than just fuel efficiency.
• Markets such as China are "underserved" and therefore capable of growing more than GDP.

Let's take a closer look at each argument in turn.

READ THE FULL EQUITY RESEARCH ARTICLE LINKED

5 Conclusions From Emerson Electric's Conference Call

Any presentation from Emerson Electric CEO David Farr usually contains some straight talk -- you would want nothing else from a business leader -- and the company's Investor Conference presentation provided just that. Farr offered detailed color commentary on the company's future, and the key conclusions from his talk gave succor to the bullish thesis for the stock. Here's how and why.

READ THE FULL EQUITY RESEARCH ARTICLE LINKED

What Mosaic Offers Investors in 2016

Looking at The Mosaic Company's (NYSE:MOS) recent fourth-quarter earnings presentation, it's clear that management is encouraging investors to look beyond the near-term pressures and consider the long-term case for the company. Investing in the fertilizer sector offers a classic example of the conundrums presented by highly cyclical stocks. Value trap or long-term buy? Try to pick the bottom, or just buy and wait for value to out itself? And does your target have a long-term structural problem, or is it merely in a temporary and cyclical decline?


As you can see from the chart above, it's been a tough five years for both Mosaic and its key rival, Potash Corporation of Saskatchewan (NYSE:POT).

READ THE FULL EQUITY RESEARCH ARTICLE LINKED

Why Danaher Corp Stock Could Rise

It's no secret the industrial sector is experiencing difficult times, but one stock has notably outperformed in the last year. Danaher Corporation's (NYSE:DHR) mix of non-energy-related end markets coupled with upside potential from corporate actions have led the stock to outperform the both the S&P 500 and the industrial sector -- as measured by the iShares US Industrials ETF.

DHR data by YCharts.

The question is, can it continue? Here are three reasons it could.

READ THE FULL EQUITY RESEARCH ARTICLE LINKED

What's Going on With Advance Auto Parts?

Advance Auto Parts is arguably an attractive deep-value stock, but you rarely get deep value without flaws attached. In this case, the company's integration of General Parts International (owners of Carquest and worldpac), and catching up with the kinds of margins boasted by rivals like O'Reilly Automotive and AutoZone, Inc ), have disappointed so far.
In fact, while its peers are busy generating healthy same-store-sales growth, Advance Auto Parts has turned negative. What exactly is going wrong, and can it be fixed?

DATA SOURCE: ADVANCE AUTO PARTS, INC PRESENTATIONS.

READ THE FULL EQUITY RESEARCH ARTICLE LINKED

General Electric Company Management Wants You to Know This About its Future

When a company's management is asked what investors might not understand about their business or earnings prospects, it's usually time to listen. Based on his comments at the Barclays Industrial Select Conference, General Electric Company's  CFO Jeff Bornstein thinks the market is underestimating the potential of Predix, GE's cloud-based platform-as-a-service (PaaS) solution that runs applications helping users capture and analyze industrial data. Does this mean the company has a hidden value about to be released in future years?

DATA ANALYTICS CAN HELP CUSTOMERS RUN GENERAL ELECTRIC TURBINES MORE EFFICIENTLY. IMAGE SOURCE: GENERAL ELECTRIC.

READ THE FULL EQUITY RESEARCH ARTICLE LNKED

United Technologies vs Honeywell International

United Technologies (NYSE:UTX) or Honeywell International (NYSE:HON)? Both companies have heavy exposure to aerospace and global construction markets and therefore face similar headline risks. In addition, both are going through transition periods in 2016. The changes will compromise revenue and earnings in 2016 but are designed to ensure long-term earnings and cash flow generation. So which stock will win out this year?

HON data by YCharts.

READ THE FULL EQUITY RESEARCH ARTICLE LINKED

UPS Earnings and What They Mean to FedEx Corporation

It's always interesting to compare the earnings reports of FedEx Corporation and United Parcel Service . It isn't always easy, though, as they report results halfway in between each other's quarters. In this case, UPS reported at the start of February, while FedEx will give its third-quarter results in mid-March. Let's look at the trends and developments in UPS's fourth-quarter earnings and what they mean to FedEx.

READ THE FULL EQUITY RESEARCH ARTICLE LINKED