With the economy rebounding, Validea CEO John Reese says several stocks in the capital goods sector are looking attractive right now.
“Just when things looked so bleak [last summer], the economy staged an impressive turnaround. Numerous reports — from unemployment claims numbers to manufacturing data to retail sales — have shown that the economy hasn’t just weathered last summer’s storm; it has actually made some of the most significant improvement we’ve seen in quite some time,” Reese writes in his latest column for MSN’s Top Stocks blog. “And businesses are indicating we’ll see continued growth. New orders for capital goods — machinery and other equipment companies buy to make products — jumped 5.1% in December after having risen 8% in November, according to Commerce Department data. Those orders fell 5% in January, but a big reason for that seems to be the expiration of a tax credit that promoted capital spending. Many economists say the underlying trend remains strong.”
Reese notes that the Capital Goods portfolio he monitors on his Validea Pro website is up more than 18% this year. And he looks at a handful of capital goods stocks that his Guru Strategies — each of which is based on the approach of a different investing great — are high on right now. Among the stocks: Cummins Inc., which is a favorite of his Peter Lynch-inspired strategy. To see all the stocks and read the full article, click here.