2023-06-05 15:41:21 ET
Investors have an opportunity for gains by buying stocks in industrial and building products distributors during a period of seasonal weakness, according to analysts at Baird.
“We advise tactical agility, but remain positive over the next several years given our favorable view on the cycle (recession/early cycle usually sees outperformance for the group),” David J. Manthey, analyst at Baird, said in a June 2 report. “We would use expected weakness in the coming months to add to positions for most of our list.”
Baird’s coverage includes industrial distributors Applied Industrial Technologies Inc. ( NYSE: AIT ), Fastenal Company ( NASDAQ: FAST ), W.W. Grainger Inc. ( NYSE: GWW ), MSC Industrial Direct Co. Inc. ( NYSE: MSM ) and Wesco International Inc. ( NYSE: WCC ).
The firm’s coverage building products stocks includes Beacon Building Products ( NASDAQ: BECN ), Builders FirstSource Inc. ( NYSE: BLDR ), Core & Main Inc. ( NYSE: CNM ), Ferguson PLC ( NYSE: FERG ), GMS Inc. ( NYSE: GMS ), Hillman Solutions Corp. ( NASDAQ: HLMN ), Pool Corp. ( NASDAQ: POOL ), SiteOne Landscape Supply Inc. ( NYSE: SITE ) and Watsco Inc. ( NYSE: WSO ).
“Both industrial and building products distributors have outperformed during recession and three to five years thereafter each of the last four cycles, so we believe the multi-year setup remains favorable for the group from here,” according to Baird.
Industrial and Building Products Suppliers rated by Baird | |
June 2 | |
Name (ticker) | Rating |
Applied Industrial Technologies Inc. ( AIT ) | Outperform |
Beacon Building Products ( BECN ) | Neutral |
Builders FirstSource Inc. ( BLDR ) | Neutral |
Core & Main Inc. ( CNM ) | Outperform |
Fastenal Company ( FAST ) | Neutral |
Ferguson PLC ( FERG ) | Outperform |
GMS Inc. ( GMS ) | Outperform |
W.W. Grainger Inc. ( GWW ) | Outperform |
Hillman Solutions Corp. ( HLMN ) | Outperform |
MSC Industrial Direct Co. Inc. ( MSM ) | Outperform |
Pool Corp. ( POOL ) | Neutral |
SiteOne Landscape Supply Inc. ( SITE ) | Outperform |
Wesco International Inc. ( WCC ) | Outperform |
Watsco Inc. ( WSO ) | Outperform |
More about industrial and building suppliers
- Grainger's stock rises on improved earnings guidance
- Builders FirstSource downgraded to Neutral at Baird
For further details see:
Buy stocks of industrial distributors on price weakness: Baird