May 31, 2021
6 min read
This story originally appeared on stock Exchange
3 main industrial stocks to watch in June 2021
it wouldn’t surprise me to see that industrial actions are still among the most active stocks in the stock Exchange now. After all, as most know, the US economy remains on the rise. In turn, industrial companies that are arguably the backbone of the economy are also expected to thrive. While the consensus is such, how well is the economy doing right now?
For starters, the job market continues to improve as jobless claims fell to 406,000 last week from estimates of 425,000. This marks another consecutive low in the pandemic era. Meanwhile, rising inflation rates have recently raised concerns among investors. This would be due to the consumer price index rising at an annualized rate of 4.2% in April. According to a Bureau of Labor Statistics report, this is the biggest jump in 12 years. However, the deputy director of the National Economic Council, Bharat Ramamurti, said last week that “is a good sign“. According to Ramamurti, the rapid rise in consumer prices shows that “the economy is recovering faster than many expected“. As such, I could see investors eyeing the main industrial values now.
For example, we could look at Johnson Controls International (NYSE: JCI), an Irish building safety equipment company. Last week Barclays (NYSE: BCS) Analyst Julian Mitchell hit JCI stock with an overweight rating. Meanwhile, the agricultural manufacturing company John Deere (NYSE: FROM) appears to be on an uptrend as the economy is booming. Overall, JCI and DE actions have more than doubled over the past year. Nevertheless, investors seem to be interested in the main industrial stocks of today’s stock market. If you are too, here are three you should know right now.
Industrial stocks to buy [Or Sell] This week
Semiconductor manufacturing in Taiwan
First, we will take a look at the Taiwan Semiconductor Manufacturing Company (TSM). In short, it is currently the largest semiconductor manufacturer in the world. According to TSM, 85% of the world’s prototypes of semiconductor startup products are activated through the company and its collaborations.
Today, semiconductors are one of, if not the most important, components of the manufacturing process of virtually all modern technology. From our smart devices to our automobiles, semiconductor chips act as the brains of everything. By extension, this would make TSM stock a relevant industrial tech game in our world today. As it stands, TSM stock is sitting on gains of over 120% over the past year.
Now, the number one investor concern with TSM is said to be the current global shortage of semiconductor chips. As an ideal long-term solution, TSM plans to invest $ 100 billion to expand its chip manufacturing capabilities over the next three years. Subsequently, President Mark Liu provided a positive operational update in an interview with CBS last month. According to Liu, TSM is looking to catch up with requests for automatic chips by the end of June. There is no doubt that the company appears to be shifting into high gear right now as demand for semiconductors remains at record levels. Considering all of this, would you consider TSM stock to be a buy right now?
Vertex Energy Inc.
Vertex Energy is another industry player to focus on now. In a certain context, Vertex is a specialized refiner of alternative raw materials. The Texas-based company also markets high purity petroleum products. Notably, Vertex is one of the largest converters of used motor oil in the United States. In terms of scale, the company has an annual processing capacity of over 115 million gallons of oil. More importantly, VTNR stock appears to be on investor radars as its value more than quadrupled last week.
By diving into it, investors are likely reacting to the company’s latest acquisition. On May 26, Vertex fully acquired the Mobile Chemical LP refinery from Royal Dutch Shell (NYSE: RDS.A). With this $ 75 million deal, Vertex is essentially strengthening its operations at all levels. As CEO Benjamin Cowart pointed out, this acquisition is the “the biggest and most important transaction ever“. According to Cowart, the movement positions Vertex to become a “leading regional supplier of renewable and conventional products“. Ideally, the deal should be finalized in the fourth quarter of 2021.
Long term, Vertex also appears confident in its recent purchase. As a first step, Vertex will convert the hydrocracking unit at the Mobile refinery, which will be completed by 2022. Second, the company predicts that it could potentially generate “at least $ 3 billion in revenue and $ 400 million in gross margin”During the year 2023. Of course, these numbers are impressive, but time will tell if Vertex can do it. Either way, would you consider VTNR shares to be worth investing in right now?
Lockheed Martin Company
Topping the list is the Lockheed Martin Corporation. For the uninitiated, Lockheed Martin is a global leader in aerospace, military support, and security technology. Thanks to its massive portfolio, the company is also one of the largest defense contractors in the world, if not the most important. Safe to say, when it comes to national security, Lockheed Martin would be a leader in space. Likewise, investors looking to invest in the defense industry would turn to LMT stocks now.
In its recent quarterly fiscal year released at the end of April, Lockheed Martin posted total revenue of $ 16.3 billion for the quarter. On top of that, the company also saw a 47% increase in its cash flow, totaling $ 2.93 billion. According to CEO James Taiclet, this strong quarter’s momentum puts the company in a good position to move forward. Moreover, Lockheed Martin also appears confident as it raised its financial outlook for fiscal 2021.
While all of this is great, the company is not yet resting on its laurels. Since last week, Lockheed Martin is currently working with General Motors (NYSE: DG). Essentially, the duo are developing next-generation lunar vehicles for the National Aeronautics and Space Administration (NASA). In theory, these vehicles will be used to transport astronauts to the surface of the Moon. Given that Lockheed Martin is partnering with a big name in the auto industry, we might envision a powerful alliance here. As the company seeks greater heights in space exploration, do you think LMT stock could follow suit?