tuachanwanthan
The Industrial Select Sector SPDR (XLI) ended the week ended January 27 in the green (+2.17%). XLI was among nine of 11 S&P 500 sectors to close the week with gains.
While news of acquisitions helped Evoqua climbed among the gainers (in our segment), JetBlue led the decline where there were also several railroad shares.
U.S. private sector firms saw output fall further in January, but it eased to the slowest pace in three months, according to January’s S&P Global US PMI. However, there were some positive signs for the economy as US GDP rose to 2.9% in the fourth quarter according to the initial estimate, which was more than expected.
Meanwhile, the SPDR S&P 500 Trust ETF ( SPY ) rose +2.48% in a week, ahead of the Federal Reserve meeting next week where it is expected to raise rates by 25 basis points.
The five biggest gainers in the industrials sector (stocks with market caps over $2 billion) all gained more than +12% every this week.
Evoque Water Technologies (NYSE: AQUA) +16.45%. Shares of Evoq rose on Monday after Xylem ( XYL ) agreed to acquire the Pittsburgh, Pa.-based company in an all-stock deal with an implied enterprise value of ~$7.5 billion.
AQUA had an SA Quant Rating — which takes into account factors such as momentum, profitability and valuation, among other things — Hold. The stock had a factor rating of C+ for profitability and C for growth. The average Wall Street analyst rating was Buy, with 3 out of 10 analysts rating it a Strong Buy.
Applied Industrial Technologies (AIT) +14.74%. The Cleveland-based company saw its shares rise on Thursday (+11.36%) after Q2 results exceeded estimates. AIT also increased its quarterly dividend by 2.9%.
SA’s Quantitative Rating on AIT is Strong Buy, with a B+ on Momentum but a D on Valuation. The average Wall Street analyst rating has a buy rating, with 2 out of 3 analysts considering the stock a strong buy.
The chart below shows the price return performance over the last 6 months of the top five gainers and the SP500:
TDCX (TDCX) +13.20%. Shares of the Singapore-based customer services outsource provider rose on Friday (+14.10%). SA’s quantitative rating on TDCX is Buy, with A for Profitability and A- for Momentum. The average Wall Street analyst rating for the stock is Strong Buy, with 3 out of 6 analysts marking the stock as Strong Buy.
United Rentals (URI) +13.14%. Stocks rose +9.94% Jan. 26 after the company announced a quarterly dividend, launched a $1 billion share buyback program and provided full-year 2023 guidance in its fourth-quarter results a day ago during aftermarket trading. The Stamford, Conn.-based company. SA Quant has a Strong Buy rating, while Wall Street analysts’ average rating is Buy.
Hexcel (HXL) +12.88%. The maker of structural materials for the aerospace and defense sector saw its shares rise on January 26 (+9.03%) after announcing a +25% increase in its quarterly dividend and fourth-quarter results that beat analysts’ expectations, Jan. 25 after the market. SA’s quantitative rating on HXL and the average Wall Street analyst rating have their own hold rating.
This week’s five biggest decliners among industrial stocks (market caps over $2 billion) all lost more than -5% each.
JetBlue Airways (NASDAQ: JBLU) -7.11%. Shares of airline companies fell the most on Friday (-4.55%), however a day ago even the company’s fourth-quarter results that beat expectations couldn’t cheer the stock, which closed -0.71% (January 26).
SA’s quantitative rating for JBLU is Hold, with a factor rating of D+ for profitability and C for growth. The average rating of Wall Street analysts agrees with their own Hold rating, with 10 out of 13 analysts calling the stock a Hold.
Xylem (XYL) -7.04%. While news of the acquisition boosted Evoq, it was the opposite for Xylem as the company’s stock sank on Monday (-7.95%) as the merger was considered a ‘textbook example of overpayment.’
SA’s Quantitative Rating for XYL is Hold, with a B for Momentum but an F for Valuation. The rating contrasts with Wall Street analysts’ average buy rating, with 4 out of 17 analysts marking the stock as a strong buy.
The chart below shows the price recovery performance over the past 6 months for the five worst declines and the XLI:
Automatic Data Processing (ADP) -6.90%. Shares of the Roseland, NJ-based company fell -4.66% on Wednesday after mixed quarterly results as non-standardized second-quarter earnings per share beat estimates but revenue was in line.
SA’s quantitative rating on ADP is Hold, with an A+ for profitability but a C- for growth. The average rating of Wall Street analysts agrees with their own Hold rating, with 13 out of 19 analysts considering the stock a Hold.
CSX (CSX) -6.03%. Railroad stocks fell on Wednesday after reports from several major operators offered a cautious outlook for 2023. Even the company’s fourth-quarter results that beat analysts’ estimates also didn’t help the stock much.
The SA Quant Rating on CSX is Hold, which contrasts with Wall Street analysts’ average Buy rating.
South Norfolk (NSC) -5.85%. Norfolk was among the rail road sections that took a hit on January 25 (-5.05%). The company’s quarterly results also failed to provide support as profits fell short of estimates. The SA Quantitative Rating and the average rating of Wall Street analysts on NSC have their own hold rating.