Seeking Alpha
Newsletter provider, fund holdings, insider ownership
Profile| Send Message|
( followers)  

The best performing stocks in the market are usually the highest growing stocks or the stocks with the highest expected growth rates. This doesn’t mean that one should be invested in growth stocks and stay away from the value stocks at all times. Historically, value stocks managed to beat the growth stocks hand over fist. The reason is simple. Value stocks are beaten down stocks with very low or negative growth expectations. Not surprisingly it is easier for these stocks to beat the expectations on the average. On the other hand, everybody is extremely bullish about growth stocks and expect them to have higher growth rates in the future. Their stock prices also reflect this fact. Not surprisingly, it is more difficult for these stocks to beat these challenging expectations.

We ranked the industrial stocks based on their expected five-year growth rates. The data source for Wall Street Analysts’ projections is Thomson Financial. Industry classifications were obtained from Fidelity. Contrarian investors should look into the stocks that are at the top of the table.

Company

Ticker

Exp. 5-Year Growth Rate

Forward PE Ratio

Market Cap

OSHKOSH CORP

OSK

3.6

9.1

$3.2B

L-3 COMMUNICATIONS HOLDINGS

LLL

4.3

9

$9.1B

NORTHROP GRUMMAN CORP

NOC

5.3

9.6

$19.9B

GENERAL DYNAMICS CORP.

GD

6.6

9.9

$28.5B

CORRECTIONS CORP OF AMERICA

CXW

6.7

16.1

$2.6B

ITT CORPORATION

ITT

7.3

11.6

$10.8B

URS CORP

URS

8.1

11.3

$3.7B

R.R. DONNELLEY & SONS CO

RRD

8.7

8.7

$3.9B

ALASKA AIR GROUP

ALK

8.8

7.9

$2.2B

NORDSON CORPORATION

NDSN

9.1

15.5

$3.9B

ROLLINS

ROL

9.4

26.2

$2.9B

EQUIFAX

EFX

9.6

13.5

$4.7B

WATSON WYATT WORLDWIDE

TW

10.0

12

$4.1B

RAYTHEON CO.

RTN

10.1

9.1

$18.2B

CLARCOR INC.

CLC

10.1

17.2

$2.2B

3M CO

MMM

10.2

13.3

$66.1B

KBR INC

KBR

10.8

15.1

$5.6B

CINTAS CORPORATION

CTAS

10.9

16.3

$4.3B

GRAINGER (W.W.) INC.

GWW

11.1

15.5

$9.6B

VERISK ANALYTICS

VRSK

11.3

18

$5.6B

PARKER HANNIFIN CORP.

PH

11.3

13.6

$15.3B

AMETEK

AME

11.4

18.3

$6.9B

PALL CORP.

PLL

11.5

17.3

$6.6B

UNITED TECHNOLOGIES CORP.

UTX

11.6

13.9

$77.5B

ROCKWELL COLLINS

COL

11.6

13.9

$9.8B

DUN & BRADSTREET CORP (DE)

DNB

11.6

11.6

$3.9B

WASTE MANAGEMENT

WM

12.0

14.4

$17.7B

STERICYCLE

SRCL

12.0

27.6

$7.5B

DANAHER CORP.

DHR

12.1

17

$34.2B

HONEYWELL INTERNATIONAL

HON

12.3

13.5

$46.8B

DOVER CORP

DOV

12.3

13.5

$12.1B

IDEX CORPORATION

IEX

12.4

16.1

$3.5B

GOODRICH CORP.

GR

12.5

13.7

$10.6B

COPA HOLDINGS S.A.

CPA

12.6

8.8

$2.3B

REPUBLIC SERVICES

RSG

12.6

13.9

$11.6B

ROPER INDUSTRIES

ROP

12.7

19

$8.2B

NORFOLK SOUTHERN CORP.

NSC

12.9

12.9

$26.1B

EXPEDITORS INTL. OF WA.

EXPD

13.1

23.6

$10.4B

DONALDSON CO. INC.

DCI

13.2

19.8

$4.7B

CSX CORP.

CSX

13.3

13.3

$29.5B

WASTE CONNECTIONS

WCN

13.3

17.3

$3.3B

CHICAGO BRIDGE & IRON CO.

CBI

13.4

14.7

$4.0B

IRON MOUNTAIN INC

IRM

13.4

21.4

$6.3B

ILLINOIS TOOL WORKS

ITW

13.4

12.1

$27.1B

SNAP-ON

SNA

13.6

12.2

$3.5B

GENESEE & WYOMING INC.

GWR

13.6

19

$2.4B

C.H. ROBINSON WORLDWIDE

CHRW

13.6

23.2

$11.9B

JACOBS ENGINEERING GROUP

JEC

13.7

16.4

$6.2B

PENTAIR

PNR

13.7

13.7

$3.7B

GARDNER DENVER

GDI

13.8

15.2

$4.0B

Some of these stocks have significant hedge fund ownership. Bill Ackman’s Pershing Square had $196 million in CXW at the end of December. Stephen Mandel’s Lone Pine had a $181 million position in TW. Bill Miller and Ken Fisher have MMM and UTX positions. Steve Cohen had a $300+ million position in DHR’s stocks and bonds. Ken Fisher had a $285 million position in Honeywell and a $441 million position in Dover (DOV) at the end of December. Lee Ainslie’s Maverick and Andreas Halvorsen’s Viking Global have GR in their portfolios.

We believe these stocks will be more likely to exceed their expectations and outperform their peers as a portfolio.

Source: Top Industrial Stocks With Highest Upside Potential