Stock Ideas From Friday's PPI Report: Del Monte, Fed-Ex, Dow Chemical, Curtiss Wright, Computers and Semis

Headline from Friday: Producer prices up 1 percent in March:

Overall producer prices rose 3.2 percent from March a year ago, the biggest climb since a 3.8 percent 12 month gain to August 2006. However, core producer prices rose 1.7 percent from the same period 12 months ago, down from a 1.8 percent year-over-year rise in February.

That’s all well and good, but also well reported. However, we like to dig a little deeper and see which industries are benefiting from pricing power, as it could help us identify interesting stock ideas. The PPI charts are from the Bureau of Labor Statistics and presented as the year/year percentage change in price.

Highlight: anyone know a good pure play in the turbine business?

Fruit and vegetable canners have pricing power:

And it still isn’t showing up in Del Monte’s (DLM) stock price:

Corrugated box prices are getting weaker:

Which may be a signal that demand for them - say, from FedEx (FDX) - is weak:

Given what’s happening to chemical pricing:

We think Dow Chemical (DOW) should be more receptive to buyout talks.

All the buyers for industrial valves:

Should be good for Curtiss Wright (CW).

Scarily for Dell (DELL) and Hewlett Packard (HPQ), computer pricing may only get worse.

Finally, semiconductor prices have taken a turn for the worse.

That should be enough to chew on over what remains of the weekend.

Comments

[Richard Dommer]

re: Corrugated box prices are getting weaker:

Amzon, trading at ttm pe >90, PEG ~3, also comes to mind. Everything they sell comes in a corrugated box.

I have a short position in AMZN.

[William Trent]

Excellent point.