Green light!
Investors got the “all clear” sign to buy Industrials (XLI) yesterday. In a tough day of trading, the sector was up +0.73% versus -0.36% for the S&P 500. All other sectors were down on the day.
The sector got a shot in the arm from this week’s Industrial Production numbers which rose +0.5%. This broke a 15-month streak of negative year-over-year growth. It’s yet another sign that the U.S. industrial recession is finally over. To be clear, we think Industrials is the sector to own as the broader U.S. economy accelerates heading into 2017.
WHAT TO BUY
One stock our Industrials analyst Jay Van Sciver likes is Textron (TXT). It’s a $13 billion manufacturer of aviation, defense and industrial products. Textron will be one of the prime beneficiaries of a more robust defense budget under President Trump.
As Van Sciver has been saying for some time now, “This is a name that’s cheap with an evolving story, a growing platform, franchises, technologies and some great investments, so it’s fairly easy to see the narrative shift from a real value name to the realm of growth valuation.”
