Are Capex Cycle Stocks Poised To Outperform This Year?

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our subject capex cycle stock — which includes heavy equipment manufacturers, power systems suppliers, automation solutions providers, and semiconductor manufacturing equipment players — performed well through 2021, growing nearly 32% year over year, outperforming the S&P 500, which was the same period was higher by about 27%. , The subject is also up about 3% so far in 2022, compared to the S&P 500, which is down about -2%. So is the theme set to do better this year as well? It seems that this is possible for two reasons.

With the global economic recovery likely to continue through 2022, companies are expected to prioritize improving capacity and easing supply chain bottlenecks that are evident through the COVID-19 reopening. were clear. In addition, companies can invest more in automation solutions to mitigate the effects of a tight labor market and rising wages. Separately, the passage of the US infrastructure bill last year should also increase government spending on physical infrastructure. These trends may drive demand for goods and services provided by companies about us. There are some technical factors that can help these stocks as well. Since most of the stocks in our theme are relative price selections (the selling multiplier 3.7x the average price), this could also be attractive as the Federal Reserve plans several rate hikes over the course of the year.

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within our subject, Applicable Materials. This is due to the increasing demand for fabrication. Device. On the other hand, industrial major honeywell Its stock has been the weakest performer in the past 12 months with only 2% rise, as it witnesses a slow recovery post-Covid, given its exposure to the aerospace segment, which has been through the pandemic. One of the most hit businesses ever.

Below you’ll find our previous coverage of the Capex Cycle theme where you can track our outlook over time.

[11/8/2021] Stocks to choose from after passage of US infrastructure bill

After months of delay, the $1 trillion infrastructure bill was finally passed by the House of Representatives on Friday. The bill would authorize existing spending and invest about $550 billion in new funds in areas including improving infrastructure such as roads, bridges, highways, drinking water, as well as expanding access to broadband Internet and upgrading the electric grid. This can lead to a strong demand for our theme capex cycle stock That includes heavy equipment manufacturers, power systems suppliers, automation solutions providers, and semiconductor manufacturing equipment players that benefit from higher capital expenditures by businesses and the government.

The theme has already outperformed the year, rising nearly 32% since the beginning of January, compared to a nearly 25% increase in the S&P 500 over the same period. Shares have also outperformed through the COVID-19 pandemic, up nearly 93% since the end of February 2020, and we think outperformed, given the potentially strong revenue growth rate going forward. Stocks trade in the theme, and have a relatively low income multiplier.

within our subject, Applicable Materials. Demand has increased. On the other hand, industrial major honeywell It has been the weakest performer, with its stock rising just 6% year-on-year, as the company sees a slow recovery post-Covid, given its exposure to the aerospace segment, which is among the largest. Was one of the hit businesses. global pandemic.

[10/6/2021] Honeywell, Caterpillar: Delayed Infrastructure Bill An Opportunity To Buy Capex Stocks?

our subject capex cycle stock Heavy equipment manufacturers, electrical systems suppliers, automation solutions providers, and semiconductor manufacturing equipment players benefit from higher capital expenditures by businesses and the government. While the subject-matter is up about 20% year-over-year, compared to the S&P 500, which was up about 16% over the same period, it has declined slightly in recent weeks, due to a delay in the passage of $1. trillion infrastructure bill amid some disagreement within the Democratic Party. The party is now hoping to pass the bill by the end of October.

However, this may be a good time to take a look at these stocks. The passage of the bill could be a major catalyst for many stocks in our subject, as the bill would add about $450 billion in already approved funds to modernize roads, passenger rail, as well as new infrastructure over the next five years. There is demand for about $550 billion in spending. , bridges, power grids, and drinking water. This may lead to an increase in the demand for industrial products, heavy equipment and machinery.

within our subject, Applicable Materials. demand has increased. On the other hand, industrial major honeywell It has been the weakest performer, with its stock rising just 2% year-on-year, as the company sees a slow recovery post-Covid, given its exposure to the aerospace segment, which is among the largest. Was one of the hit businesses. global pandemic.

Interested in choosing specific stocks under this theme? View our dashboard Honeywell vs Rockwell, industry peers; Which stock is the better bet?

[8/13/2021] Caterpillar, Rockwell Automation: Stock Holds to Take on as Capex Cycles

our subject capex cycle stock Growing 30% year-over-year, it outperformed the S&P 500, which grew 19% over the same period. Topics include heavy equipment manufacturers, power system suppliers, automation solutions providers, and semiconductor manufacturing equipment players that benefit from higher capital expenditures by businesses and the government.

There are indications that demand is picking up well after the COVID-19 lockdown, with Q2 earnings for the companies in our case stronger than expected. Kamla, for example, saw revenue from its construction and processing segments rise nearly 40% year over year, with earnings comfortably beating estimates. Caterpillar’s order backlog increased by $5.5 billion compared to last year. Rockwell Automation Year-over-year revenue grew 33% and raised its full-year guidance, with a 50% increase over last year, trailing sales growth. Separately, there is growing optimism that a more than $1 trillion US infrastructure bill will be passed by Congress, prompting strong demand from major industrial companies.

within our subject, Applicable MaterialsLtd., a company that supplies equipment used in the production of semiconductor and display products, has been the strongest performer with its stock increasing 50% year over year, as demand surges due to a lack of semiconductor supply. happened. On the other hand, industrial major honeywell The company has been the weakest performer, with its stock up nearly 9% year-over-year.

[8/2/2021] Stocks to Consider as $1 Trillion Infrastructure Bill Advances

our subject Stocks Benefiting from Capital Expenditure Growing 31% year-over-year, it outperformed the S&P 500, which is up 17% over the same period. The theme has seen a solid 72% growth since the end of 2019. Themes include heavy equipment manufacturers, electrical systems suppliers, automation solutions providers, and semiconductor fabrication equipment players that benefit from higher capital expenditures by businesses and the government. On Friday, the United States Senate voted by a significant margin to advance a $1 trillion infrastructure bill that prioritizes the renovation of roads, bridges, rail, water and related public works. If the bill is eventually signed into law, it could set off the largest investment in US infrastructure in nearly a century. Separately, businesses have a lot of incentive to prioritize capital spending, lower interest rates, solid growth in corporate profits and rising prices through the COVID-19 reopening.

within our subject, Applicable Materials, a company that supplies equipment used in the production of semiconductor and display products, has been the strongest performer with a solid 62% increase in its stock so far, as demand due to a lack of semiconductor supply have increased. On the other hand, industrial major honeywell It has been the weakest performer, with its stock rising nearly 10% year-over-year.

[6/30/2021] Caterpillar, Honeywell, Deere: Will the Fed’s Hawkish Stance Hurt Capex Stocks?

our subject Stocks that benefit from rising trading expenses Growing up 30% year-over-year, it outperformed the S&P 500, which has gained about 15% over the same period. Topics include heavy equipment manufacturers, power system suppliers, automation solutions providers, and semiconductor manufacturing equipment players that stand to benefit from higher capital expenditures by businesses. within our subject, Applicable MaterialsLtd., a company that supplies equipment used in the production of semiconductor and display products, has been the strongest performer with a solid 64% increase in its stock so far. On the other hand, industrial major honeywell Has been the weakest performer, in its stock by…

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