NEW YORK (AP) — A William Blair analyst said Monday that shares of multi-industry industrial companies should continue to rise over the next few months and potentially into next year, boosted by improving economic conditions both at home and abroad.
THE OPINION: Nicholas Heymann noted that shares of companies that make everything from automotive systems to heavy equipment and industrial components have already risen a combined 13 percent from their early June lows and are now about 2 percent below their recent peak in April.
Heymann said it's possible that the stocks will rise another 3 percent to 7 percent by early November. And after the presidential election, they could rise an additional 20 percent to 30 percent by the second half on 2013, as capital spending, hiring and economic growth rebound, while the U.S. dollar continues to weaken.
Meanwhile, it appears that China's economy may be starting to pick up and worries about Europe's debt crisis have declined significantly, he said.
Heymann said his favorite stocks in the sector include diversified manufacturer Dover Corp., Swiss engineering group ABB Ltd., Swiss-based manufacturer Tyco International Ltd., Canadian aircraft maker Bombardier Inc. and United Technologies Corp., whose products range from jet engines to elevators.
He added that he's also closely watching industrial equipment and software maker Rockwell Automation Inc. and diversified manufacturer Eaton Corp., along with Johnson Controls Inc., which makes both building and automotive systems.
THE SHARES: In afternoon trading, Dover shares fell $1.14 to $59.90; ABB's U.S. shares edged down 16 cents to $19.34; Tyco lost 19 cents to $55.84; and United Technologies fell 88 cents to $79.87.
Meanwhile, Rockwell Automation rose 13 cents to $71.95; Johnson Controls fell 8 cents to $28.37 and Eaton dropped 61 cents to $47.52.
The broader markets were down less than 1 percent.