Charts From Today's PPI Report Show Who Has the Pricing Power

Includes: CW, DLM, FTO, PX, SMH, STLD
by: William Trent, CFA

Producer prices rose 0.7 percent in April:

Elevated energy costs pushed producer prices up a slightly more-than-expected 0.7 percent in April, but excluding volatile food and energy costs, prices paid at the factory gate were unchanged, a Labor Department report released on Friday showed.

As the headline (and core) numbers get widely reported, I like to dig a little deeper into the PPI report to find industries that appear to have more (or less) pricing power than normal. If the pricing power has not yet been recognized widely it can occasionally lead to some good stock picks. (All pricing power charts are from the Bureau of Labor Statistics.)

The pricing power in fruit and vegetable canning appears to be helping Del Monte (DLM) gain some momentum.

fruit veggie


Refinery margins hurt Large Cap Watch List member Frontier’s (NYSE:FTO) earnings. Is a turnaround in sight?


One place the pricing power theory definitely didn’t work is in industrial gas. The stocks never weakened, and now pricing power seems to be making a comeback.

industrial gas


Consolidation and pricing power? What’s not to like about Mid Cap and Large Cap Watch List member Steel Dynamics’ (NASDAQ:STLD) prospects?



Pricing power for industrial valves helped me call the recent earnings pop for Curtiss Wright (NYSE:CW).

industrial valves


Would you look what’s happening to semiconductor pricing? Who would have expected that?


Well, that seems like enough for now. Back again next month.