Best Industrial Stocks to Buy Before a Trade Deal

Hassan Maishera - December 13, 2019

The China trade war dominated the headlines in 2019. Tariffs had a huge impact on the market and the economy. Industrial stocks were hit harder than many other sectors. However, after over a year of negotiations, it appears we’re finally getting close to a deal.

The “phase-one” deal could have a massive impact on the stock market. Opportunistic traders should be looking for bargains and building sizeable positions in stocks that are due for a trade deal pop. Industrial stocks are strong candidates in this category. They could be rally once the trade deal is finalized.

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Industrial Stocks News

The United States and China are very close to a deal, according to the White House. The US has offered to reduce tariffs on Chinese goods starting Sunday. Sources told CNBC that tariffs could be cut by as much as 50%.

Once President Trump agrees to the terms, the deal should go in effect. Stocks popped when the news broke. However, the market is holding its breath while it waits for Chinese confirmation.

The US offered to reduce duties on $360 billion in Chinese products, and China agreed to buy $40 billion in goods from the US. However, President Trump is pushing for $50 billion.

Top Industrial Stocks to Buy Before a Trade Deal

With the phase one trade deal looking closer than ever, here are some industrial stocks you could buy before the agreement is signed.

Johnson Controls International Plc. (JCI)

Johnson Controls has been one of the best performing industrial stocks in 2019. The company’s share price is up by 40% since the start of 2019. With the trade deal set to be signed any time soon, the company’s stock price could head higher.

Johnson Controls produces and sells HVAC equipment, building automation, security, fire detection, batteries, and similar products. Earlier this month, the company made a management change.

industrial stocks

Johnsons Controls offers a variety of vital industrial products. Demand for these types of products could sky-rocket if a phase-one deal is signed.

They appointed Ganesh Ramaswamy as vice president and president, Global Services & Transformation. Mr. Ramaswamy is tasked with providing leadership for the company’s global services, which generates roughly $6.3 billion annually.

W.W. Grainger Inc. (GWW)

W.W. Grainger is an American Fortune 500 supply company that manufactures and repairs operating products such as lighting, hand and power tools, HVAC, and more. The shares of the company are up by 22% year-to-date and could record further gains by next year.

Over the past three quarters, 14 analysts have rated the W.W Grainger stock as a ‘BUY.’ This implies that they see the potential of the stock price to rise over the coming months. Analysts from firms such as JP Morgan, Raymond James, Well Fargo SEC, William Blair, and others all rate it as a BUY.

Flowserve Corp (FLS)

Flowserve Corp is one of the largest suppliers of industrial and environmental machinery in the world. FLS is up 29% since the start of 2019 and, with a trade deal on deck, Flowserve’s could rally over the coming months.

Flowserve made some managerial changes earlier this month. The company appointed John E. Roueche, III, as Interim Chief Financial Officer. John E. Roueche, III is already serving in other capacities, as the company’s vice president, treasurer and investor relations.

Stanley Black & Decker, Inc. (SWK)

Stanley Black & Decker, Inc. is a manufacturer of industrial tools, household hardware, and security products. Shares are up 35% year-to-date, making it one of the industrial sector’s most solid performers.

industrial stocks - black and decker

A phase-one trade deal could give the industrial economy a shot in the arm, and Black and Decker could be a major beneficiary of an increase in industrial activity.

Stanley Black & Decker’s stock is rated as a BUY by analysts from UBS Group. Some analysts have also raised their ratings for the stock as they believe it would reach the $175 mark over the coming weeks and months.

More Industrial Stocks to Buy Before Trade Deal

The trade deal with China is looking closer than ever, and the market is preparing for it. Industrial stocks could rally if a phase-one deal passes. Subscribe to the Dork to get the latest on the trade deal and how it affects US stocks. You can get even more stock market news by following the Stock Dork on Twitter and Facebook. Don’t miss another update, sign up for mobile Dork Alerts to get hot stock picks, insights, and analysis delivered directly to your phone.

Hassan Maishera is a cryptocurrency expert and a Stock Dork freelance contibutor.

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