Top 5 Industrials Stocks of 2018
TIMOTHY SMITH | December 31, 2018
The industrials sector encompasses a broad range of companies that focus on industrial and commercial services, operations, equipment and more. Because of the breadth of industries requiring specialized equipment and services, there are many lines of business within the industrials sector. Industrials companies cover everything from airlines to farming to railroads and beyond. As a sector heavily influenced by the strength of the economy (during weak periods, industrials companies often perform below benchmarks) and which is also closely linked with emerging markets, recent years have been strong for many of these stocks. For much of 2018, the upward trend continued for industrials names. Global manufacturing continued to grow throughout much of the year, while in the U.S. the Institute for Supply Management's indices measuring manufacturing and production rates continued to grow through November. With many corporations flush with cash through much of the year, opportunities for delivering new equipment in an effort to boost productivity were available. Manufacturing inventories were also generally low throughout 2018, signaling room for growth.On the other hand, there were also negative pressures on the industrials sector throughout 2018. Ongoing disputes between the U.S. and China over trade impacted nearly every sector in some way, and industrials stocks felt this impact as farms, companies relying on heavy manufacturing and more were all stunted. As the Fed has raised rates four times in 2018, shares of these stocks have also faced headwinds. Further, global manufacturing rates grew, but at a slower rate than in previous years. This, combined with increasing global economic concerns, could spell trouble for industrials stocks heading into 2019.