SPX, ECM, WEIR: 3 manufacturing stocks you should focus now

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SPX, ECM, WEIR: 3 manufacturing stocks you should focus now

 SPX, ECM, WEIR: 3 manufacturing stocks you should focus now
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Highlights

  • As per the latest survey of the British Chambers of Commerce (BCC), almost two-thirds of UK-based businesses are expected to increase prices in the next three months.
  • Amongst all the segments, manufacturing companies gave a clear indication of price rise, with as many as 92% of manufacturers citing the cost of raw materials as the primary reason.

As per the latest survey of the British Chambers of Commerce (BCC), almost two-thirds of UK-based businesses are expected to increase prices amid rising inflationary pressure in the next three months. Companies across manufacturing and services segments may raise prices, adversely impacting the consumers already facing a cost-of-living crisis.

The latest quarterly survey was conducted by BCC, with responses received from more than 5,600 firms. Amongst all the segments, manufacturing sector companies gave a clear indication of price rise, with as many as 92% of manufacturers citing the increase in raw material cost as a primary reason for the hike in prices in the upcoming months. An increase in energy & transport cost, hike in employer salaries and rise in interest rates are the other key reasons.

Overall, around 62% of the firms are expected to increase their price compared to 58% in the last quarter of 2021. The current price rise scenario witnessed across the manufacturing segment companies is mainly to protect their profit margins amid inflationary pressure, which has been accelerated by the rise in energy prices.

3 manufacturing stocks in focus

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Let us look at 3 FTSE listed manufacturing stocks that could be in focus:

Spirax-Sarco Engineering Plc (LON: SPX)

FTSE 100 listed company offers commercial steam systems and thermal energy management products to its clients from different industries. The company sells its products directly and through distributors across different countries.

The post-pandemic economic recovery across different industrial groups has benefited Spirax-Sarco’s business. Its total revenue increased by 13% to £1,344.5 million, with an operating profit of £320.9 million for the year ended 31 December 2021.

Spirax-Sarco Engineering Plc’s last close was at GBX 12,535 on 31 March 2022, with a market cap of £9,227 million.

Electrocomponents Plc (LON: ECM)

The company provides various industrial products like automation & controls used across different segments, test & measurement products. The company has diversified business operations across different countries, with the Americas region contributing majorly to overall revenue.

For nine weeks to 4 March 2022, Electrocomponents reported revenue growth of 22%. The company is actively monitoring the current economic and political situation and its impact on the business. But it still expects full-year revenue and operating profit margins for the year ending 31 March 2022 to be ahead of the market expectations.

Electrocomponents Plc’s last close was at GBX 1,084 on 31 March 2022, with a market cap of £5,105 million.

Weir Group Plc (LON: WEIR)

The UK-based company manufactures and sells original equipment used in mining activities and infrastructure industries. 

In 2021, Weir Group acquired Motion Metrics which helped accelerate its business strategy. Its total original equipment orders increased by 22% to £2,196 million in the year ended 31 December 2021, resulting in total revenue of £1,934 million and adjusted operating profits of £296 million.

Weir Group Plc’s last close was at GBX 1,641 on 31 March 2022, with a market cap of £4,260 million.

Note: The above content constitutes a very preliminary observation or view based on market trends 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.

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