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What are we looking for?

U.S. industrial stocks showing bullish price momentum.

Our strict top-down methodology at Trading Central focuses on sectors displaying upside momentum within the direction of the S&P 500 trend. Over the past month, the S&P 500 Industrials index has been the top sector performer with a gain of 11.1 per cent, followed by real estate (9.9 per cent) and financials (9.5 per cent). The worst-performing sector was health care, which is down 1.7 per cent since May 18.

The screen

We will be using Trading Central Strategy Builder to search for U.S.-listed industrial stocks. We will focus on companies with a market capitalization of more than US$3-billion to limit our results to the largest and most stable stocks in the market.

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To select stocks with strong upward price momentum, we will select only stocks whose prices have increased by 10 per cent or more year-to-date.

We have also included one-year price performance, price-to-earnings and dividend yield for your reference.

More about Trading Central

Trading Central is a global leader in financial market research and investment analytics for retail online brokers and institutions. Its product suite provides actionable trading ideas based on technical and fundamental research covering stocks, exchange-traded funds, indexes, forex, options and commodities. Strategy Builder, our stock screener, is available through leading retail brokers in Canada and worldwide.

What we found

Topping our list is Fastenal Co., an industrial products supply company. Its stock price has returned 13.8 per cent year-to-date. Fastenal also has the highest dividend yield on our list at 2.4 per cent. Looking at the recent price action, Fastenal has returned an impressive 57 per cent since March coronavirus crash lows and hovers near record highs. Fastenal has been a strong momentum stock over the past few weeks. We anticipate a continuation to new record highs.

Roper Technologies Inc. designs and develops software and engineered products and services for a variety of niche end markets. The company has the largest market cap on our list at US$42-billion. Much like Fastenal, Roper has soared to new record highs since the pandemic lows. The stock price has surged more than 68 per cent since the March bottom, posting a record high on June 5.

Old Dominion Freight Lines Inc. is the one of the largest trucking companies in the United States. The company has the best stock performance on our list with a 29.1-per-cent performance year-to date and a 72.5-per-cent return over one year.

It is clear the industrial sector is in a strong uptrend over the past month as industrial companies emerge from lockdowns owing to the coronavirus.

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The investment ideas presented here are for information only. They do not constitute advice or a recommendation by Trading Central in respect of the investment in financial instruments. Investors should conduct further research before investing.

Select U.S.-listed industrial stocks

RankCompanyTickerMkt. Cap. (US$ Bil.) YTD Price Perf. (%)1 Yr Price Perf. (%)P/EDiv. Yld. (%)Recent Price (US$)
1Fastenal Co.FAST-Q24.113.829.830.42.442.06
2Old Dominion Freight LinesODFL-Q19.329.172.531.70.4163.36
3Equifax IncEFX-N20.721.727.334.70.9170.47
4Nordson CorpNDSN-Q11.219.245.933.00.8194.11
5Booz Allen Hamilton HoldingBAH-N11.011.821.423.31.679.51
6Advanced Drainage SystemsWMS-N3.424.354.1217.30.848.26
7Knight-Swift TransportationKNX-N7.014.228.523.50.840.94
8Verisk Analytics IncVRSK-Q27.111.914.943.50.7167.05
9Roper Technologies IncROP-N42.013.610.340.50.5402.23
10Exponent IncEXPO-Q4.012.230.449.01.077.44

Source: Trading Central

Gary Christie is head of North American research at Trading Central in Ottawa.

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