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In the week ending February 3, the Federal Reserve raised its benchmark rate by 25 basis points, but Chairman Jerome Powell warned that the central bank still has “more work to do” to reduce inflation.
Industrial Select the SPDR Sector (XLI) ended the week in the plus (+1.69%). XLI was among eight of 11 S&P 500 sectors to close the week with gains. Zim topped industrial gains (in our segment) this week, but it was earnings that played the main role among most of the gains and declines.
The SPDR S&P 500 Trust ETF ( SPY ) rose +1.64% for the week, which saw ISM Manufacturing fall more than expected in January. ISM services rose more than expected, while the PMI manufacturing index showed a surprise increase in January.
The five biggest gainers in the industrials sector (stocks with market caps over $2 billion) all gained more than +14% every this week.
ZIM Integrated Shipping Services (NYSE: ZIM) +22.78%. Shares of the Israeli shipping company rose all week, the most on Thursday (+7.90%). ZIM has 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 A+ for profitability, but F for growth. The average rating of Wall Street analysts agrees with their own Hold rating, with 5 out of 7 analysts seeing the stock as such.
WW Grainger (GWW) +18.19%. Shares rose the most on Feb. 2 +12.96% after the maintenance and repair products distributor forecast continued growth in 2023. The company’s fourth-quarter adjusted EPS beat consensus, but revenue, while up year-over-year, was narrowly missed.
SA’s quantitative rating at GWW is Hold, with a C+ for momentum but a D- for valuation. The average rating of Wall Street analysts also agrees with the Hold rating, with 9 out of 17 analysts seeing the stock the same way.
The chart below shows the price return performance over the last 6 months of the top five gainers and the SP500:
Central Group (HUBG) +16.58%. Trucking service provider based in Oak Brook, Ill. also gained after its earnings results (Feb. 2 after market) as GAAP earnings per share beat estimates and the stock rose on Friday (+6.05%).
SA’s quantitative rating on HUBG is Buy, with a B+ rating for both profitability and momentum. The average rating of Wall Street analysts has its own buy rating, with 8 out of 18 analysts marking the stock as a strong buy.
Pentair (PNR) +15.21%. Shares of the water solutions provider jumped on Tuesday (+9.23%) after fourth quarter adjusted EPS and revenue beat analysts’ estimates. The London-based company has a Hold rating from SA Quant, while Wall Street analysts’ average rating is Buy.
AO Smith (AOS) +14.40%. The water heating product developer’s fourth-quarter results beat expectations, sending shares soaring +13.67% Tuesday. The quantitative rating of SA on AOS and the average rating of Wall Street analysts have a Hold rating.
This week’s five biggest decliners among industrial stocks (market caps over $2 billion) all lost more than -6% each.
Kanzhun (NASDAQ: BZ) -12.52%. Shares of the Beijing-based online recruitment platform have been volatile throughout 2022 with significant ups and downs. This week, stocks fell the most on Friday (-6.17%).
SA’s quantitative rating on BZ was maintained with a B- rating for profitability and C+ for growth. The rating contrasts sharply with Wall Street analysts’ average rating of strong buy, with 9 out of 13 analysts seeing the stock as such.
CNH Industrial (CNHI) -8.36%. Shares of developers of agricultural and construction vehicles fell -8.83% on Thursday despite fourth-quarter results beating estimates. The company also noted that it will delist from the Euronext Milano stock exchange.
SA’s quantitative rating on CNHI is Strong Buy, with an A for Momentum and a C for Valuation. The average Wall Street analyst rating is Buy, with 10 out of 18 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:
Ameresco (AMRC) -6.84%. Shares fell the most on Thursday (-3.45%). The renewable energy supply solutions provider has an SA Quant Rating is Hold, with a D+ rating for profitability but an A- for growth. The average Wall Street analyst rating differs from a Strong Buy rating, with 9 out of 12 analysts seeing the stock as a Strong Buy.
Caterpillar (CAT) -6.34%. The stock fell -3.52% on Tuesday after the company announced that its quarterly profit was negatively affected by changes in the value of the US dollar, compared to currencies in other countries. Non-GAAP EPS for the fourth quarter missed analysts’ estimates. The SA Quant Rating on CAT is Strong Buy, while the average Wall Street analyst rating is Buy.
Woodward (WWD) -6.15%. The aerospace maker’s first-quarter revenue beat estimates, but EPS on a non-standard basis missed estimates, sending shares into the red on Tuesday (-6.47%). WWD’s quantitative rating of SA is Sell, which contrasts with Wall Street analysts’ average Hold rating.