ROK - This 1 Stock Tells You Everything You Need to Know About Investing in Industrial Stocks in 2024
2023-11-11 06:30:00 ET
It's never easy being an investor, and it's no simple task in the current environment. While the events of 2020 may seem awhile away now, they are still having a significant and complicated impact on matters going into 2024, which can be seen in the trends in Rockwell Automation (NYSE: ROK) . Here's why and what investors must consider before putting money to work here.
The question facing investors, and mainly those interested in a cyclical sector like industrials , is this: We know the manufacturing and industrial sector is slowing, and high interest rates curtail economic activity, so it's natural to expect some slowdown. Indeed, the data and anecdotal evidence from leading companies suggests a slowing. However, how much is it due to economic forces extending through 2024, and how much is due to temporary factors caused by the aftermath of actions taken during the pandemic?
The problem is that the headline data will look the same in both cases, but the outcome in 2024 will differ depending on which factor has more weight. If it's mainly due to end-demand weakness, then companies could continue to report disappointing earnings. At the same time, if it's primarily due to an inventory correction, orders will grow again -- something Rockwell's management expects will happen for its business.
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This 1 Stock Tells You Everything You Need to Know About Investing in Industrial Stocks in 2024