- The Dow Jones Industrial Average is down nearly 14 per cent year-to-date (YTD) and the S&P/TSX Capped Industrials Index has lost 10.55 per cent YTD
- AVP has risen 50 per cent so far, this year
- SES has gained 74 per cent in the last nine months and for this year it is up over 28 per cent
Because industrial companies manufacture equipment and such for other companies and don’t serve the consumers directly, these stocks may see a fall in price during times of inflation and recession, when expansion plans may be cast aside.
This year has had the factors needed to turn the market bearish toward industrial stocks. The Dow Jones Industrial Average is down nearly 14 per cent year-to-date (YTD) and the S&P/TSX Capped Industrials Index has lost 10.55 per cent YTD.
However, let’s look at some stocks that have been outperforming the sector.
Avcorp Industries Inc (TSX:AVP)
Avcorp serves the aerospace industry and AVP, at a cost of C$0.105 at market close Thursday, May 19, is a penny stock. Penny stocks can sometimes zoom quickly.
AVP has risen 50 per cent so far, this year, and is 75 per cent better than its 52-week low that it saw on February 25.
Secure Energy Services (TSX:SES)
Secure Energy serves the oil and gas sector with infrastructure and at market close Thursday costed C$6.74.
It has gained 74 per cent in the last nine months and for this year it is up over 28 per cent. In the last week it surged eight per cent.
Element Fleet Management Corp (TSX:EFN)
EFN closed the trade session Thursday at C$13.70. It has risen nearly 18 per cent over the last month.
This year, it is in the green by 6.4 per cent and in the past week it has returned about 10 per cent.
IBI Group (TSX:IBG)
IBG ended Thursday at C$12.94. While it is in the red by four per cent YTD, so far, in May, it has recovered nearly 15 per cent.
On a one-year basis it has returned over 27 per cent. Its P/E ratio of 16.8 beats that of EFN.
PyroGenesis Canada Inc (TSX:PVR)
PVR has mostly had a downward trajectory this year but looks to be on the rebound. It closed Thursday at C$2.42.
PVR has rebounded 5.2 per cent over the last one week. It is in the green by about three per cent over the last month. In comparison, the S&P/TSX Capped Industrials Index is up 0.31 per cent over one week and in the red by over 10 per cent over one month.
At its current price, it is 71 per cent cheaper than its 52-week high of C$8.43.
Of course, depending on the industry, industrial stocks can vary. Some the valuation metrics of some of the above stocks are in negative territory.
However, as the graphic shows and compared to the sector in general, these stocks may be called outperformers. Some may be volatile too and since they are subject to market forces, much research is needed before considering investment.
Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.