12 Industrial Good Stocks With Encouraging Accounting Trends

As the US economy continues to show signs of slow but steady growth do you think companies in the industrial goods sector could benefit? With that in mind we wanted to look for industrial goods companies that are showing signs of positive accounting trends.

To create our list we began with a universe of firms with a market caps above $300M in the industrial goods sector with a float short under 5%. This short float is considered low, and means that at least 95% of investors are not betting a price decrease.

Receivables

From here we looked to see which of these companies have encouraging data coming from their account receivables.  Since receivables are a form of revenue not yet received it is considered bullish to be collecting more payments paid in full, or closer to full. Receivable trends are encouraging because it helps to gauge whether the quality of sales, not just the quantity, is increasing over time. There is no absolute guarantee that receivables will be collected in full, so the less the better.

Our screen looks for revenues that are increasing with receivables compromising a smaller percent of those revenues quarter to quarter. It implies the outstanding payments due to the firm are being paid off more and more, and the quality of their accounts are increasing. 

Inventory

Our final screen analyzed inventory trends. It’s important for industrial goods companies to sell their inventory so this is an important characteristic for the firm’s health. To be specific, we screened for those stocks with encouraging sales trends and higher growth in revenue than inventory year-over-year, as well as inventory comprising a smaller portion of current assets over the same time period. In a nutshell, when sales and revenue grow faster than inventory the company is doing a good job, or at least a better job, selling its product.

To understand why these trends are positive, think why the opposite trends would be negative. If a company sees higher growth in inventory than revenue, it may indicate that the company is having trouble selling its inventory.

Business Section: Investing Ideas

Both of these trends are important for industrial goods companies, and when a firm is seeing both of them happen at the same time, this is a bullish signal. Do you think these companies will be able to continue moving their product with increasing efficiency and effectiveness? 

Use the Compar-O-Matic to analyze the one-year returns for some of the companies listed below:

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1. AAON Inc. (AAON, Earnings, Analysts, Financials): Engages in the manufacture and sale of air conditioning and heating equipment primarily in the United States and Canada. Market cap at $696.04M, most recent closing price at $28.41.

Revenue grew by 23.04% during the most recent quarter ($78.01M vs. $63.4M y/y). Accounts receivable grew by 0.93% during the same time period ($44.59M vs. $44.18M y/y). Receivables, as a percentage of current assets, decreased from 52.35% to 48.71% during the most recent quarter (comparing 3 months ending 2012-12-31 to 3 months ending 2011-12-31).

Revenue grew by 23.04% during the most recent quarter ($78.01M vs. $63.4M y/y). Inventory grew by -6.7% during the same time period ($32.61M vs. $34.95M y/y). Inventory, as a percentage of current assets, decreased from 41.41% to 35.62% during the most recent quarter (comparing 3 months ending 2012-12-31 to 3 months ending 2011-12-31).

 

2. Alamo Group, Inc. (ALG, Earnings, Analysts, Financials): Provides equipment and related replacement parts for maintenance and agriculture. Market cap at $483.64M, most recent closing price at $40.07.

Revenue grew by 1.63% during the most recent quarter ($149.4M vs. $147M y/y). Accounts receivable grew by -3.18% during the same time period ($140.27M vs. $144.87M y/y). Receivables, as a percentage of current assets, decreased from 52.42% to 45.72% during the most recent quarter (comparing 3 months ending 2012-12-31 to 3 months ending 2011-12-31).

Revenue grew by 1.63% during the most recent quarter ($149.4M vs. $147M y/y). Inventory grew by -5.03% during the same time period ($108.76M vs. $114.52M y/y). Inventory, as a percentage of current assets, decreased from 41.44% to 35.45% during the most recent quarter (comparing 3 months ending 2012-12-31 to 3 months ending 2011-12-31).

 

3. AO Smith Corp. (AOS, Earnings, Analysts, Financials): Engages in the manufacture and sale of water heating equipment to the residential and commercial markets in the United States and internationally. Market cap at $3.6B, most recent closing price at $75.43.

Revenue grew by 8.75% during the most recent quarter ($509.6M vs. $468.6M y/y). Accounts receivable grew by -6.14% during the same time period ($423.7M vs. $451.4M y/y). Receivables, as a percentage of current assets, decreased from 40.79% to 38.32% during the most recent quarter (comparing 3 months ending 2013-03-31 to 3 months ending 2012-03-31).

Revenue grew by 8.75% during the most recent quarter ($509.6M vs. $468.6M y/y). Inventory grew by -1.39% during the same time period ($169.8M vs. $172.2M y/y). Inventory, as a percentage of current assets, decreased from 15.56% to 15.36% during the most recent quarter (comparing 3 months ending 2013-03-31 to 3 months ending 2012-03-31).

 

4. Columbus McKinnon Corporation (CMCO, Earnings, Analysts, Financials): Designs, manufactures, and markets material handling products and services for commercial and industrial end-user markets in the United States, Europe, and Canada. Market cap at $366.21M, most recent closing price at $18.78.

Revenue grew by 7.33% during the most recent quarter ($153.22M vs. $142.75M y/y). Accounts receivable grew by -0.84% during the same time period ($78.71M vs. $79.38M y/y). Receivables, as a percentage of current assets, decreased from 28.63% to 26.12% during the most recent quarter (comparing 3 months ending 2012-12-31 to 3 months ending 2011-12-31).

Revenue grew by 7.33% during the most recent quarter ($153.22M vs. $142.75M y/y). Inventory grew by -2.65% during the same time period ($101.53M vs. $104.29M y/y). Inventory, as a percentage of current assets, decreased from 37.61% to 33.7% during the most recent quarter (comparing 3 months ending 2012-12-31 to 3 months ending 2011-12-31).

 

5. Deltic Timber Corp. (DEL, Earnings, Analysts, Financials): Deltic Timber Corporation, a natural resources company, together with its subsidiaries, grows and harvests timber, as well as manufactures and markets lumber. Market cap at $794.12M, most recent closing price at $62.48.

Revenue grew by 35.64% during the most recent quarter ($41.56M vs. $30.64M y/y). Accounts receivable grew by -8.22% during the same time period ($7.48M vs. $8.15M y/y). Receivables, as a percentage of current assets, decreased from 42.43% to 24.98% during the most recent quarter (comparing 3 months ending 2013-03-31 to 3 months ending 2012-03-31).

Revenue grew by 35.64% during the most recent quarter ($41.56M vs. $30.64M y/y). Inventory grew by 17.33% during the same time period ($5.62M vs. $4.79M y/y). Inventory, as a percentage of current assets, decreased from 24.93% to 18.77% during the most recent quarter (comparing 3 months ending 2013-03-31 to 3 months ending 2012-03-31).

 

6. Fluor Corporation (FLR, Earnings, Analysts, Financials): Provides engineering, procurement, construction, maintenance, and project management services worldwide. Market cap at $9.28B, most recent closing price at $56.98.

Revenue grew by 12.33% during the most recent quarter ($7,022.72M vs. $6,252.13M y/y). Accounts receivable grew by 0.7% during the same time period ($1,242.69M vs. $1,234.02M y/y). Receivables, as a percentage of current assets, decreased from 20.99% to 20.39% during the most recent quarter (comparing 3 months ending 2012-12-31 to 3 months ending 2011-12-31).

Revenue grew by 12.33% during the most recent quarter ($7,022.72M vs. $6,252.13M y/y). Inventory grew by -0.21% during the same time period ($1,942.68M vs. $1,946.75M y/y). Inventory, as a percentage of current assets, decreased from 33.12% to 31.88% during the most recent quarter (comparing 3 months ending 2012-12-31 to 3 months ending 2011-12-31).

 

7. John Bean Technologies Corporation (JBT, Earnings, Analysts, Financials): Provides technology solutions for the food processing and air transportation industries in the United States and internationally. Market cap at $600.22M, most recent closing price at $20.74.

Revenue grew by 7.88% during the most recent quarter ($292.9M vs. $271.5M y/y). Accounts receivable grew by -0.53% during the same time period ($188.4M vs. $189.4M y/y). Receivables, as a percentage of current assets, decreased from 51.06% to 41.76% during the most recent quarter (comparing 3 months ending 2012-12-31 to 3 months ending 2011-12-31).

Revenue grew by 7.88% during the most recent quarter ($292.9M vs. $271.5M y/y). Inventory grew by -10.71% during the same time period ($109.2M vs. $122.3M y/y). Inventory, as a percentage of current assets, decreased from 32.97% to 24.21% during the most recent quarter (comparing 3 months ending 2012-12-31 to 3 months ending 2011-12-31).

 

8. James Hardie Industries SE (JHX, Earnings, Analysts, Financials): James Hardie Industries SE manufactures and sells fiber cement building products for interior and exterior building construction applications primarily in the United States, Australia, New Zealand, the Philippines, Canada, and Europe. Market cap at $4.59B, most recent closing price at $52.45.

Revenue grew by 13.22% during the most recent quarter ($320.4M vs. $283M y/y). Accounts receivable grew by 1.61% during the same time period ($125.9M vs. $123.9M y/y). Receivables, as a percentage of current assets, decreased from 27.32% to 18.38% during the most recent quarter (comparing 3 months ending 2012-12-31 to 3 months ending 2011-12-31).

Revenue grew by 13.22% during the most recent quarter ($320.4M vs. $283M y/y). Inventory grew by 1.01% during the same time period ($180.9M vs. $179.1M y/y). Inventory, as a percentage of current assets, decreased from 39.49% to 26.42% during the most recent quarter (comparing 3 months ending 2012-12-31 to 3 months ending 2011-12-31).

 

9. Mueller Water Products, Inc. (MWA, Earnings, Analysts, Financials): Mueller Water Products, Inc. manufactures and markets a range of water infrastructure, flow control, and piping component system products for use in water distribution networks and water treatment facilities in the United States and Canada. Market cap at $933.64M, most recent closing price at $5.92.

Revenue grew by 13.79% during the most recent quarter ($245.1M vs. $215.4M y/y). Accounts receivable grew by -31.29% during the same time period ($135.9M vs. $197.8M y/y). Receivables, as a percentage of current assets, decreased from 34.46% to 28.95% during the most recent quarter (comparing 3 months ending 2012-12-31 to 3 months ending 2011-12-31).

Revenue grew by 13.79% during the most recent quarter ($245.1M vs. $215.4M y/y). Inventory grew by -24.1% during the same time period ($190.2M vs. $250.6M y/y). Inventory, as a percentage of current assets, decreased from 43.66% to 40.51% during the most recent quarter (comparing 3 months ending 2012-12-31 to 3 months ending 2011-12-31).

 

10. PGT, Inc. (PGTI, Earnings, Analysts, Financials): Engages in the manufacture and sale of windows and doors. Market cap at $401.32M, most recent closing price at $7.70.

Revenue grew by 26.6% during the most recent quarter ($45.21M vs. $35.71M y/y). Accounts receivable grew by 1.23% during the same time period ($14M vs. $13.83M y/y). Receivables, as a percentage of current assets, decreased from 34.48% to 26.25% during the most recent quarter (comparing 13 weeks ending 2012-12-29 to 13 weeks ending 2011-12-31).

Revenue grew by 26.6% during the most recent quarter ($45.21M vs. $35.71M y/y). Inventory grew by -0.6% during the same time period ($11.53M vs. $11.6M y/y). Inventory, as a percentage of current assets, decreased from 28.92% to 21.62% during the most recent quarter (comparing 13 weeks ending 2012-12-29 to 13 weeks ending 2011-12-31).

 

11. Pall Corp. (PLL, Earnings, Analysts, Financials): Pall Corporation manufactures and markets filtration, purification, and separation products and integrated systems solutions worldwide. Market cap at $7.42B, most recent closing price at $66.71.

Revenue grew by 3.5% during the most recent quarter ($662.46M vs. $640.05M y/y). Accounts receivable grew by -2.5% during the same time period ($580.03M vs. $594.91M y/y). Receivables, as a percentage of current assets, decreased from 33.8% to 28.43% during the most recent quarter (comparing 3 months ending 2013-01-31 to 3 months ending 2012-01-31).

Revenue grew by 3.5% during the most recent quarter ($662.46M vs. $640.05M y/y). Inventory grew by -9.2% during the same time period ($404.65M vs. $445.63M y/y). Inventory, as a percentage of current assets, decreased from 25.32% to 19.83% during the most recent quarter (comparing 3 months ending 2013-01-31 to 3 months ending 2012-01-31).

 

12. Zebra Technologies Corp. (ZBRA, Earnings, Analysts, Financials): Zebra Technologies Corporation offers products and solutions that assist in identifying, tracking, and managing assets, transactions, and people. Market cap at $2.38B, most recent closing price at $46.65.

Revenue grew by 2.37% during the most recent quarter ($253.18M vs. $247.31M y/y). Accounts receivable grew by -13.88% during the same time period ($168.73M vs. $195.92M y/y). Receivables, as a percentage of current assets, decreased from 33.5% to 23.74% during the most recent quarter (comparing 3 months ending 2012-12-31 to 3 months ending 2011-12-31).

Revenue grew by 2.37% during the most recent quarter ($253.18M vs. $247.31M y/y). Inventory grew by -7.45% during the same time period ($123.36M vs. $133.29M y/y). Inventory, as a percentage of current assets, decreased from 22.79% to 17.35% during the most recent quarter (comparing 3 months ending 2012-12-31 to 3 months ending 2011-12-31).

 

 -Ryan Horch, Kapitall

 

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Analyze These Ideas: Getting Started

Read descriptions for all companies mentioned Access a performance overview for all stocks in the list Compare analyst ratings for the companies mentioned Compare analyst ratings to annual returns for stocks mentioned Real-Time Opinion: Scan the latest tweets about these companies (feed will open in a new window)

Dig Deeper: Access Company Snapshots, Charts, Filings

AAON Inc. (AAON, Chart, Download SEC Filings) Alamo Group, Inc. (ALG, Chart, Download SEC Filings) AO Smith Corp. (AOS, Chart, Download SEC Filings) Columbus McKinnon Corporation (CMCO, Chart, Download SEC Filings) Deltic Timber Corp. (DEL, Chart, Download SEC Filings) Fluor Corporation (FLR, Chart, Download SEC Filings) John Bean Technologies Corporation (JBT, Chart, Download SEC Filings) James Hardie Industries SE (JHX, Chart, Download SEC Filings) Mueller Water Products, Inc. (MWA, Chart, Download SEC Filings) PGT, Inc. (PGTI, Chart, Download SEC Filings) Pall Corp. (PLL, Chart, Download SEC Filings) Zebra Technologies Corp. (ZBRA, Chart, Download SEC Filings)

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