Industrial goods stocks may not have the star power of, say, social media/tech stocks, but that clearly doesn’t mean that the sector is without buying opportunities. In fact, there are a number of them.
Of course, the process of determining what exactly constitutes a buying opportunity is highly a highly subjective one, and there are probably at least as many ways to do so as there are investors and traders. One particularly interesting way of doing so is by using the Relative Strength Indicator (RSI).
The RSI is an indicator used in technical analysis that gauges the momentum of a stock’s price movement over a period of time by comparing its up and down closes during that time. It is used by technicians to determine whether a stock is “overbought,” which could indicate a sell-off is near, or if it is “oversold”, meaning that sharp and sudden price decreases could present a great buying opportunity.
The following 7 stocks were selected from the Industrial Goods sector, based on a two criteria:
A market-cap greater than $300 million, in other words small-cap companies and larger.
An RSI (14) reading (the stock’s relative strength over the past 2 weeks) between 40 and 30, indicating that though the stock is in, or is heading into oversold territory, and could be ready for a bounceback in the near future.
Blount International Inc. (BLT)
Industry: Machine Tools & Accessories
Market-Cap: $672 million
RSI (14): 38.96
Performance YTD: -6.20 percent
Actuant Corporation (ATU)
Industry: Diversified Machinery
Market-Cap: $2.64 billion
RSI (14): 38.75
Performance YTD: -1.50 percent
Handy & Harman Ltd. (HNH)
Industry: Industrial Equipment & Components
Market-Cap: $302.61 million
RSI (14): 37.36
Performance YTD: -5.95 percent
Plum Creek Timber Co. Inc. (PCL)
Industry: Lumber, Wood Production
Market-Cap: $7.19 billion
RSI (14): 37.08
Performance YTD: -5.12 percent
Simpson Manufacturing Co. Inc. (SSD)
Industry: Small Tools & Accessories
Market-Cap: $1.67 billion
RSI (14): 35.50
Performance YTD: -5.75 percent
Schnitzer Steel Industries Inc. (SCHN)
Industry: Metal Fabrication
Market-Cap: $759.33 million
RSI (14): 31.92
Performance YTD: -13.10 percent
Progressive Waste Solutions Ltd. (BIN)
Industry: Waste Management
Market-Cap: $2.76 billion
RSI (14): 31.22
Performance YTD: -3.15 percent