4 NZX Industrial stocks to watch out for – RAK,SKL,WDT,SPY

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  • Industrial companies involve those firms that are involved in construction, manufacturing, and infrastructure development etc.
  • Infrastructure spending by the government has increased amid COVID-19-induced economic downturn.
  • These 4 industrial stocks can be good bets.

Industrial sector includes category of companies that produce capital goods used in manufacturing and construction. It comprises companies in industrial machinery, tools, aerospace, construction, and manufacturing.

Given the COVID-19-induced economic slowdown, capital investment by the New Zealand government increased substantially. Government has also encouraged businesses that are investing in capital expenditure as part of their stimulus packages.

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Let’s have a look at the performance of these 4 NZX-listed industrial stocks.

Rakon Limited (NZX:RAK)

Rakon's underlying EBITDA forecast for FY21 has been lifted from $16 million-$18 million to $20 million-$22 million. The Group received several major orders from both new and current clients in February 2021.

The Group has also taken advantage of the constrained TCXO market, which is seeing significant growth in fiber networks around the world, resulting in strong demand for its Mercury OCXOs.

On 29 March, at the time of writing, RAK was trading flat at $0.91.

Skellerup Holdings Limited (NZX:SKL)

Skellerup Holdings Limited delivered an excellent result for the half-year period ended 31 December 2020, with record NPAT of $19.5 million. SKL's turnover was $136.6 million, and EBIT was $27.6 million, up 11% and 53% on pcp, respectively. 

An increased operating cash flow and outstanding earnings in H1 led the Company to declare an 18% increase in the interim dividend to 6.5cps, which was paid on 18 March 2021.

The Group raised its NPAT guidance from $33 million to $37 million for FY21.

On 29 March, at the time of writing, SKL was trading at $4.17, down 0.48%.

Wellington Drive Technologies Limited (NZX:WDT)

Wellington Drive Technologies witnessed a significant revenue degradation in the first 3 quarters of 2020. However, customer demand began to return in Q4 of 2020. Gross margin increased to 28.6% due to improved sales mix despite the revenue fall in 2020.

The Group announced the launch of Connect™ Monitor on 26 March, an IoT system optimised for fast retrofitting to existing cooler fleets. The label is one of four new ones expected to debut in 2021.

WDT anticipates sales of between $40 million and $43 million in 2021, with EBITDA between $2.5 million to $3 million.

On 29 March, at the time of writing, WDT was trading at $0.09, down 1.1%.

SmartPay Holdings Limited (NZX:SPY)

In Q3 of FY21, SmartPay Holdings announced a 24% increase in sales over Q3 of FY20. Its New Zealand market is stable, with sales contribution up 2% on YOY in Q3 FY21. In Australia, sales increased by 75% over the same quarter.

The future for the next year and beyond is promising. The acquiring margin in Australia has also been showing upward movement.

On 29 March, at the time of writing, SPY was trading at $0.95, down 2.06%.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)