In this article, I will analyze five industrial stocks that have high growth potential. Based on my analysis of fundamental market trends and earnings per share growth, I think these could be some of the best investments for 2012. Industrial stocks are attractive options because the economy is recovering and on a cyclical basis. The five most promising industrial stocks are discussed below:
A123 Systems Inc. (AONE) has a market capitalization of nearly $286 million and the average trading volume at almost 3 million. Beta for the stock is calculated to be 1.94 which signifies that this might be a bit risky to invest in. It could offer better returns if market fluctuates or could even end up in a loss. Earnings per share (EPS) and the price-to-earnings (P/E) ratio are not very attractive at the moment. However, sales figures are showing a positive growth trend. Income growth and profit margins are shrinking but it is predicted that the situation will improve once the market recovers from the economic downturn. Debt-to-equity ratio is 0.5 which is a positive sign.
AONE is reported to be one of the five stocks which have reacted to the positive market trends and are promising to offer better returns in this quarter and the next. It is also being predicted that this stock has a 70% upside potential over the next three years. In my opinion, it would be a viable option to buy this stock because it depicts a positive growth trend in future. Although it is not rated highly right now, I believe it has a lot of potential to offer returns to investors.
Flir Systems Inc (NASDAQ:FLIR) has a market capitalization at nearly $4 billion and the average trading volume is almost 1 million. Earnings per share are close to $1 and the price-to-earnings (P/E) ratio is 18.5. Dividend yield is approximately 1% as well. Beta for this stock is calculated to be 0.86 which indicates that it is a relatively safer investment. Debt-to-equity ratio is 0.16 and the profit margins are 14% at the moment. FLIR has been ranked as one of the stocks which have upside potentials. They are predicted to grow by almost 50% in the next few quarters. The company has also offered dividends of 7 cents in March to its shareholders.
With improving market conditions, this stock is promising to offer higher returns to investors. This stock's ratings have been revised by many of the industry experts but chances are that they might be revised again. I believe that this would be a good option for developing a diversified portfolio. With high growth potential, it would be worth considering.
Gardner Denver Inc (NYSE:GDI) has a market capitalization of almost $4 billion and the average trading volume of 776,000. Earnings per share are close to $5 and dividend yield is below 1%. Price-to-earnings (P/E0 ratio is nearly 13 and beta is calculated at 1.40. this means that the stock is relatively riskier than some but still manageable. Experts and analysts have given this stock a rating of 8 out of 10.
GDI has been categorized as one of the powerful industrial stocks that are worth buying. This is because they are offering high growth and income. It has also been categorized as one of the stocks which have been given an upgraded rating by the top analysts. The performance of this stock in the market has improved significantly. It seems that it will be able to offer high levels of growth to investors as well as capital gains. In my opinion, it is a definite buy because it is safer than most stock options and has more potential.
Republic Services Inc (NYSE:RSG) has a market capitalization of nearly $12 billion and the average trading volume is almost 3 million. Earnings per share are close to $2 and the price-to-earnings (P/E) ratio is 15. Dividend yield is almost 3% while the debt-to-equity ratio is nearly 1. The beta for this stock has been calculated at 0.82 which signifies that the stock is a safer investment.
Experts have given this stock a rating of 8 out of 10 and predict that there could be an upside of 50% in prices. It is categorized as one of the stocks which have a high potential for growth. It pays its dividends at a significant rate and offers capital gain opportunities in future. I believe that this stock can be a good investment option because of low risk and better returns.
Ingersoll-Rand (NYSE:IR) is currently trading in the market at a price per share of $41 approximately. A majority of the analysts and experts believe that the price of this stock will increase in near future. The 52-weeek trading range for this stock is between $26 and $53 per share. Market capitalization at current price is close to $12 billion and the average trading volume is nearly 4 million. Earnings per share are close to $1 and the dividend yield is almost 2%. The price-to-earnings (P/E) ratio is nearly 15 and the beta is calculated at 1.79. This signifies that the stock is relatively riskier and more volatile. A positive growth trend in sales has been seen over the last quarter which has led to an increase in profit margins. It has been referred to as one of the best investments for 2012. The earnings for the fourth quarter of 2011 were reported to exceed $242 million and it is said that the potential upside of this stock would be 50%. In my opinion, it would be a good and viable option to invest in this stock for income and growth in near future.
About the author:
I fundamentally analyze every business from the top down.
In my personal life, I have a strong Jewish faith and enjoy playing Scrabble and entrepreneurship.