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3 Top Industrial Stocks To Watch In June 2021
It would not surprise me to see that industrial stocks are still among the most active stocks in the stock market now. After all, as most would know, the U.S. economy remains on the upswing. In turn, industrial companies which are arguably the backbone of the economy would stand to prosper as well. While the consensus is such, just how well is the economy doing right now?
For starters, the labor market continues to improve as unemployment claims dropped to 406,000 last week versus estimates of 425,000. This marks yet another consecutive pandemic-era low. Meanwhile, there have been concerns over rising inflation rates amongst investors recently. This would be because of the Consumer Price Index surging at an annualized rate of 4.2% in April. Based on a report by the Bureau of Labor Statistics, this marks the biggest leap in 12 years. However, National Economic Council Deputy Director Bharat Ramamurti did say last week that this “is a good sign”. According to Ramamurti, the rapid jump in consumer prices shows that “the economy is recovering faster than a lot of people expected”. As such, I could see investors eyeing the top industrial stocks now.
For instance, we could look at Johnson Controls International (NYSE: JCI), an Ireland-based building security equipment company. Last week, Barclays (NYSE: BCS) analyst Julian Mitchell hit JCI stock with an Overweight rating. Meanwhile, agriculture-based manufacturing company John Deere (NYSE: DE) appears to be on the uptrend as the economy booms. Overall, both JCI stock and DE stock have more than doubled over the past year. Nevertheless, investors appear to be keen on the top industrial stocks in today’s stock market. If you are too, here are three to know now.
Industrial Stocks To Buy [Or Sell] This Week
Taiwan Semiconductor Manufacturing
First up, we will be taking a look at the Taiwan Semiconductor Manufacturing Company (TSM). In brief, it is the biggest semiconductor manufacturer in the world right now. According to TSM, 85% of worldwide semiconductor start-up product prototypes are enabled via the company and its collaborations.
Now, semiconductors are one of, if not the most important component, in the manufacturing process of virtually all modern tech. From our smart devices to our automobiles, semiconductor chips act as the brains of it all. By extension, this would make TSM stock a relevant industrial tech play in our world today. As it stands, TSM stock is sitting on gains of over 120% in the past year.
Now, the main concern for investors regarding TSM would be the current worldwide global semiconductor chip shortage. As an ideal long-term solution to this, TSM is planning to invest $100 billion to expand its chip fabrication capacities over the next three years. Subsequently, Chairman Mark Liu provided a positive operational update in a CBS interview last month. According to Liu, TSM is looking to catch up with auto chip demands by the end of June. No doubt, the company appears to be kicking into high gear right now as semiconductor demands remain at record highs. Taking all this into consideration, would you consider TSM stock a buy right now?
Vertex Energy Inc.
Another industrial player in focus now would be Vertex Energy. For some context, Vertex is a specialty refiner of alternative feedstocks. The Texas-based company also markets high-purity petroleum products as well. Notably, Vertex is one of the largest processors of secondhand motor oil in the U.S. In terms of scale, the company boasts an annual processing capacity of over 115 million gallons of oil. More importantly, VTNR stock appears to be on investors’ radars now seeing as it more than quadrupled in value last week.
Diving right into it, investors are likely reacting to the company’s latest acquisition. On May 26, Vertex fully acquired Mobile Chemical LP Refinery from Royal Dutch Shell (NYSE: RDS.A). Through this $75 million deal, Vertex is essentially fortifying operations across the board. As CEO Benjamin Cowart highlighted, this acquisition is Vertex’s “largest, most significant transaction ever”. According to Cowart, the move positions Vertex to become a “leading regional supplier of both renewable and conventional products”. Ideally, the deal is set to close by the fourth quarter of 2021.
In the long run, Vertex appears confident in its recent purchase as well. To begin with, Vertex will be converting the Mobile refinery’s hydrocracking unit, to be completed by 2022. Then, the company projects that it could potentially generate “at least $3 billion in revenue and $400 million of gross profit” in the full year 2023. Sure, these figures are impressive, but time will tell if Vertex can deliver on this. Regardless, would you consider VTNR stock worth investing in right now?
Lockheed Martin Corporation
Topping off our list is the Lockheed Martin Corporation. For the uninitiated, Lockheed Martin is a global leader in the aerospace, military support, and security tech industries. Thanks to its massive portfolio, the company is also one of, if not the world’s largest defense contractors. Safe to say, when it comes to national security, Lockheed Martin would be a leader in the space. Likewise, investors looking to invest in the defense industry would turn to LMT stock right now.
In its recent quarter fiscal posted in late April, Lockheed Martin raked in a total revenue of $16.3 billion for the quarter. On top of that, the company also saw a 47% increase in cash on hand, totaling $2.93 billion. According to CEO James Taiclet, the momentum from this solid quarter puts the company in a favorable position moving forward. Moreover, Lockheed Martin also appears confident as it raised its financial outlook for the fiscal year 2021.
While all this is great, the company is not resting on its laurels just yet. As of last week, Lockheed Martin is currently collaborating with General Motors (NYSE: GM). Essentially, the duo is developing next-generation lunar vehicles for the National Aeronautics and Space Administration (NASA). In theory, these vehicles will serve to transport astronauts on the surface of the moon. Seeing as Lockheed Martin is teaming up with a leading name in the automotive industry, we could be looking at a powerful alliance here. While the company looks towards greater heights in space exploration, do you think LMT stock could follow suit?