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Quarter-End Insights

Our Outlook for Industrials Stocks

Most industrials are fairly valued at present, with a pocket of value in automakers.

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  • Indicators of economic health and sentiment remain positive. The housing and automotive industries continue to rebound from recession lows. U.S. industrial production increased 1.1% sequentially and 3.2% year over year in November, and PMI is above the 50 positive demarcation in the U.S., eurozone, and China.
  • Three automotive manufacturers offer a rare pocket of value within industrials. Fiat is 5 stars, and General Motors and Ford are both 4 stars. Encouragingly, the latest U.S. light-vehicle seasonally adjusted sales of 16.4 million marks the highest for November since 17.1 million in 2003, and it's the high-water mark so far in 2013.
  • Outside of select automakers, we consider shares of most industrials to be fairly valued, putting individual stock-picking in demand.

Keith Schoonmaker has a position in the following securities mentioned above: GM. Find out about Morningstar’s editorial policies.