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

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Includes: CW, DELL, DLM, DWDP, FDX, HPQ, PSI, SMH, SOXX
by: William Trent, CFA

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?

turbines

Fruit and vegetable canners have pricing power:

fruit & veggie canning

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

dlm

Corrugated box prices are getting weaker:

boxes

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

fedex

Given what’s happening to chemical pricing:

chemicals

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

dow

All the buyers for industrial valves:

industrial valves

Should be good for Curtiss Wright (NYSE:CW).

cw

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

computers

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

semis

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

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