Another stock with more than 20% rally year-to-date
Similarly, MasTec, Inc. (NYSE:MTZ)’s stock has run, but continued growth potential could support further upside from here. The best momentum is in the electrical transmission business where this developer of electric power systems is ramping up on several of the large projects it recently won. Furthermore, it still seems well positioned to win additional work, which could drive upside to management’s guidance in 2013.
Visibility in the pipeline business also seems to be improving as management seems optimistic about several sizable long-haul opportunities it’s tracking, which tend to carry structurally higher margins and could support a more favorable pricing environment over time. AT&T Inc. (NYSE:T) spending seems set to re-accelerate in 2013, and MasTec, Inc. (NYSE:MTZ) is gradually building out its wireless presence for additional carriers in more U.S. states, which could drive incremental growth opportunities as soon as this year.
The renewables business will be a known headwind in 2013, but an extension of the production tax credits earlier this year may lead to a pickup in wind-related activity in late 2013/2014. Fixed price execution remains a risk, but MasTec, Inc. (NYSE:MTZ) has closed the book on its two problem projects in the Marcellus, and margins should benefit from a more favorable mix of higher margin transmission and pipeline revenue, as well as slightly better pricing/productivity in the wireless business.
On an overall note, the company is expected to witness above-average growth in earnings that will result from lucrative wireless and electricity transmission projects.
Can you believe it?….The third is also up more than 20% and is expected to still go up!
The Street was initially concerned about Crown Holdings, Inc. (NYSE:CCK), the packaging giant. The company’s Asian Pacific expansion plans were too aggressive and could potentially generate increased earnings volatility. However, Barclays now views the expansion plans as fluid and flexible and are impressed by management’s ability to change or cancel plans as needed.
It is interesting to note that all of the volume coming online in 2013 is contracted, which should lead to lower earnings volatility going forward. With more predictable cash flow expected this year, the company will have additional capital for share buybacks and/or a dividend, providing a positive near-term catalyst for the stock.
Overall, the can industry is expected to be resilient throughout an uncertain macro environment and coupled with Crown Holdings, Inc. (NYSE:CCK)’s stable earnings stream and solid operational performance, the company is viewed as a top pick.
My Foolish takeaway
All three stocks are recommended as some of the best ideas in the industrial goods sector. Manitowoc Company, Inc. (NYSE:MTW) is recommended as a buy on the basis of exposure to improvement in the non-residential construction market. MasTec, Inc. (NYSE:MTZ) is recommended as buy on the basis of its growing presence in the wireless infrastructure development market. Crown Holdings, Inc. (NYSE:CCK) is also a buy given management’s aggressive yet achievable plans and its shareholder-friendly capital allocation plan.
The article 3 Stocks to Buy on Improving Industrial Sector originally appeared on Fool.com and is written by Zain Abbas.
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