Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Manitowoc Company, Inc. (MTW), MasTec, Inc. (MTZ), Crown Holdings, Inc. (CCK): Three Buys on This Key Market

On a relative scale, the industrial sector has not been performing well on a year-to-date basis. This is in contrast to what the market had expected especially after an improving housing market and growth in developing economies. However, the good news is that the industrial goods sector has been on a tear since the last week after China reported solid growth figures.

The following graph shows that:

The question arises: If this momentum carries on, what are the best picks in the industrial sector? Well, I have shortlisted three of them:

3 Super Industrial Stocks

Manitowoc Company, Inc. (NYSE:MTW)Manitowoc Company, Inc. (NYSE:MTW) has already seen above 20% capital appreciation since the start of this year, which is largely credited to the improving crane market in the US, a market in which this company has strong exposure. Many analysts and investors expect there to be significant margin improvement over time.

Moreover, the Street continues to see good runway for solid crane demand going forward, with energy and infrastructure related end markets in North and South America in particular continuing to drive demand. The market has seen a subtle increase in the large infrastructural projects such as the three bridge construction projects that are beginning in the New York City area this year.

Also, solid and improving prospects for large energy and petrochemicals projects are expected to move forward over the next several years, which could continue to support crane demand. This opportunity has been created after an improvement in the wind market (as a result of the extension of production tax credits).

Beyond the energy end-markets, there are prospects for improvements in “traditional” non-residential construction in North America over time, with Manitowoc Company, Inc. (NYSE:MTW) being the best positioned amongst the machinery companies to benefit from potential recovery in non-residential construction.

Manitowoc Company, Inc. (NYSE:MTW) is increasingly focused on driving margin improvements in its crane business. While Crane margins improved by 120 bps in 2012 from a cyclical low of 5.1% to 6.3%, operational improvements such as further LEAN implementations and a more focused approach to lowering costs in its European manufacturing operations will help Manitowoc Company, Inc. (NYSE:MTW) to continue to generate solid Crane margin improvements in 2013 and beyond. A continued focus on driving positive price realization could also help drive margin recovery and, while mix has been a headwind thus far in the current cycle (with lower margin all-terrain and rough-terrain cranes leading the recovery), over time, higher margin crawler cranes could become a growing portion of the revenue mix, providing additional margin tailwinds.

In the near-term, Manitowoc Company, Inc. (NYSE:MTW)’s Foodservice business is also well positioned for continued solid execution, and could continue to see margin expansion over time as the company implements a revamped manufacturing footprint.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.