Buy stocks of industrial distributors on price weakness: Baird
Phynart Studio
Investors have an opportunity for gains by buying stocks in industrial and building products distributors during a period of seasonal weakness, according to analysts at Baird.
âWe advise tactical agility, but remain positive over the next several years given our favorable view on the cycle (recession/early cycle usually sees outperformance for the group),â David J. Manthey, analyst at Baird, said in a June 2 report. âWe would use expected weakness in the coming months to add to positions for most of our list.â
Bairdâs coverage includes industrial distributors Applied Industrial Technologies Inc. (NYSE:AIT), Fastenal Co. (NASDAQ:FAST), W.W. Grainger Inc. (NYSE:GWW), MSC Industrial Direct Co. Inc. (NYSE:MSM) and Wesco International Inc. (NYSE:WCC).
The firmâs coverage of building products stocks includes Beacon Building Products (NASDAQ:BECN), Builders FirstSource Inc. (NYSE:BLDR), Core & Main Inc. (NYSE:CNM), Ferguson Plc (NYSE:FERG), GMS Inc. (NYSE:GMS), Hillman Solutions Corp. (NASDAQ:HLMN), Pool Corp. (NASDAQ:POOL), SiteOne Landscape Supply Inc. (NYSE:SITE) and Watsco Inc. (NYSE:WSO).
âBoth industrial and building products distributors have outperformed during recession and three to five years thereafter each of the last four cycles, so we believe the multi-year setup remains favorable for the group from here,â according to Baird.







Industrial and Building Products Suppliers rated by Baird


June 2




Name (ticker)
Rating








Applied Industrial Technologies Inc. (AIT)
Outperform


Beacon Building Products (BECN)
Neutral


Builders FirstSource Inc. (BLDR)
Neutral


Core & Main Inc. (CNM)
Outperform


Fastenal Company (FAST)
Neutral


Ferguson PLC (FERG)
Outperform


GMS Inc. (GMS)
Outperform


W.W. Grainger Inc. (GWW)
Outperform


Hillman Solutions Corp. (HLMN)
Outperform


MSC Industrial Direct Co. Inc. (MSM)
Outperform


Pool Corp. (POOL)
Neutral


SiteOne Landscape Supply Inc. (SITE)
Outperform


Wesco International Inc. (WCC)
Outperform


Watsco Inc. (WSO)
Outperform



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