Lingering logistic disruptions continue to hinder production levels across major industries. The industrial sector, which essentially deals with manufacturing, has witnessed persistent production shortfalls. However, output rates have started to improve with the gradual re-opening of the economy and subsequent administrative measures to ease the supply crunch. Manufacturing output surpassed estimates in April 2022 as it leaped 5.8% year-over-year.
Furthermore, overall capacity use in the industrial sector jumped 79% in April and 78.2% in March 2022. In addition, rapid technological advancements and automation in the sector are helping the segment achieve new horizons globally, especially in emerging markets. According to Insight Partners, the global industrial automation market is projected to expand at a 7.6% CAGR from 2021 to 2028.
Given the favorable industry trends, the stocks of industrial companies Diana Shipping Inc. (DSX), Titan International, Inc. (TWI), and Genco Shipping & Trading Limited (GNK) have crushed the market by delivering a more than 35% return year-to-date. So, we think these stocks could be solid additions to one’s watchlist.
Click here to check out our Industrial Sector Report for 2022
Diana Shipping Inc. (DSX)
Based in Athens, Greece, DSX provides shipping transportation services. The company transports a range of dry bulk cargoes, including commodities such as iron ore, coal, grain, and other materials, on shipping routes worldwide. Currently, it operates a fleet of some 35 dry bulk vessels.
DSX’s time charter revenues came in at $68.84 million for the fourth quarter, ended Dec. 31, 2021, up 61.4% year-over-year. Its net income came in at $39.70 million, compared to an $8.87 million loss in the year-ago period. In addition, the company’s EPS came in at $0.48, compared to a $0.10 loss per share.
For 2022, analysts expect DSX’s revenue to be $281.97 million, representing a 42.4% year-over-year increase. In addition, the company’s EPS is expected to increase 200% to $1.23 in 2022. The stock has gained 6.3% in price over the past month and 43.7% year-to-date to close yesterday’s trading session at $5.59.
DSX’s POWR Ratings reflect this promising outlook. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
The stock has an A grade for Growth and a B grade for Momentum. Within the B-rated Shipping industry, it is ranked #20 of 45 stocks. Click here to see the additional POWR Ratings for Value, Stability, Sentiment, and Quality for DSX.
Titan International, Inc. (TWI)
TWI and its subsidiaries manufacture and sell wheels, tires, and undercarriage systems and components for off-highway vehicles in North America, Europe, Latin America, the Commonwealth of Independent States region, the Middle East, Africa, Russia, and internationally. The Quincy, Ill.-based company operates in Agricultural; Earthmoving/Construction; and Consumer segments.
On May 2, 2022, President and CEO Paul Reitz said, “All of our business units across all geographies came together to deliver our strongest sales quarter in nearly nine years. The first quarter experienced strong top line growth, along with excellent conversion to the bottom line, as gross margins were 15.6%, adjusted EBITDA was $57 million, and adjusted EBITDA margin climbed to 10.2%, reaching their strongest levels in close to a decade.”
TWI’s net sales increased 37.8% year-over-year to $556 million for the first quarter, ended March 31, 2022. Its adjusted net income came in at $28.17 million, up 587.6% year-over-year, while its adjusted EPS came in at $0.44, up 528.6% year-over-year.
Analysts expect TWI’s revenue to increase 19.4% year-over-year to $2.13 billion in 2022. The company’s EPS is also expected to grow 84.7% to $1.57 in 2022. It surpassed EPS estimates in three of the trailing four quarters. The stock has gained 23.2% in price over the past month and 66.8% year-to-date to close yesterday’s trading session at $18.28.
TWI has an overall B rating, which indicates a Buy in our proprietary rating system. It has an A grade for Growth and a B grade for Value and Sentiment. Within the B-rated Industrial - Machinery industry, it is ranked #17 of 78 stocks. Click here to see the additional POWR Ratings for Momentum, Stability, and Quality for TWI.
Genco Shipping & Trading Limited (GNK)
GNK in New York City and its subsidiaries engage in the ocean transportation of dry bulk cargoes worldwide. The company owns and operates dry bulk carrier vessels to transport iron ore, coal, grains, steel products, and other dry-bulk cargoes. It operates some 44 dry bulk carriers.
On May 4, 2022, CEO John C. Wobensmith said, “Looking ahead to the second quarter of 2022, we have the majority of our available days booked at over $27,500 per day, highlighting the significant operating leverage of our sizeable fleet, best-in class commercial operating platform and barbell approach to fleet composition.”
GNK’s total revenues for its fiscal first quarter, ended March 31, 2022, came in at $136.23 million, up 55.5% year-over-year. Its net income came in at $41.69 million, up 2,000.2% year-over-year. Furthermore, its EPS came in at $0.97, up 1,840% year-over-year.
Analysts expect GNK’s revenue to increase 5.2% to $126.36 million for the quarter ended Sept.30, 2022. Its EPS is expected to rise 60.3% per annum for the next five years. The stock has gained 36.4% in price year-to-date to close yesterday’s trading session at $21.82.
It is no surprise that GNK has an overall B rating, which equates to a Buy in our proprietary rating system. In addition, it has a B grade for Growth, Value, Momentum, and Quality.
GNK is ranked #13 of 45 stocks in the Shipping industry. We have also rated the stock for Stability and Sentiment. Click here to get all the GNK ratings.
Click here to check out our Industrial Sector Report for 2022
DSX shares were trading at $5.38 per share on Wednesday afternoon, down $0.21 (-3.76%). Year-to-date, DSX has gained 43.79%, versus a -17.34% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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