ITT - 3 Diversified Operations Stocks to Overcome Industry Headwinds | Benzinga
Persistent challenges in the manufacturing sector with tepid orders for products and services have marred the outlook of the Zacks Diversified Operations industry. The lingering effects of supply-chain issues, especially related to the availability of electronic components, have been another concern for industry participants.
The industry is benefiting from the strength across aerospace, defense and oil & gas industries. Healthy demand across medical and life science end markets and growth in the commercial aviation sector have been proving beneficial for the industry. Carlisle Companies Incorporated (NYSE: CSL), Griffon Corporation (NYSE: GFF) and ITT Inc. (NYSE: ITT) are likely to capitalize on the opportunities.
About the Industry
The Zacks Diversified Operations industry includes companies that operate in various end markets, including oil & gas, industrial, electronics, power, aviation, technology, finance, healthcare, chemical, non-residential construction and transportation. Such companies manufacture and provide equipment and solutions, including bioprocessing products, molecular testing-related products, gas and steam turbines, generators, commercial jet engines and engineered fluid-process equipment. Industry players also provide related services to a large customer base. A few companies offer services in the agriculture, marine and telecommunications markets and are engaged in providing environmental and safety solutions. The diversified market operators have a vast global presence, with exposure in the United States, Japan, India, China, Canada and other countries.
Major Trends Shaping the Future of the Diversified Operations Industry
Weakness in the Manufacturing Sector: Persistent weakness in the manufacturing sector has been denting demand in the industry. Per the Institute for Supply Management report, in April 2024, the Institute for Supply Management's manufacturing index registered 49.2%. A figure less than 50% indicates a contraction in manufacturing activity. The New Orders Index returned to the contraction territory at 49.1% in April, declining 2.3 percentage points from the figure recorded in March. Also, supply-chain disruptions, particularly related to the availability of electronic components, are a concern for industry participants of late.
Strength in Aerospace and Defense Markets: The prospects of multi-sector companies are closely linked to the operating conditions of end markets. Some factors that currently favor ...