3 Undervalued Industrial Stocks To Buy Now

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The industrial sector received a major setback last year as industrial activities practically came to a halt due to the COVID-19 pandemic. However, with the economy reopening this year thanks to an aggressive vaccination push, industrial activities are increasing. 

Total industrial production increased 1.4% in March. The annualized growth in industrial production was 2.5% in the first quarter. And President Biden’s proposed $2 trillion infrastructure plan is expected to provide a further boost to the industrial sector.

Investors’ interest in the industrial market is evident from the Industrial Select Sector SPDR Fund’s (XLI) 24.3% gains over the past six months versus the SPDR S&P 500 Trust ETF’s (SPY) 19.6% returns. 

Given this backdrop, we think it could be wise to bet on industrial stocks that possess strong financials but are still undervalued. And Hitachi Ltd. (HTHIY), Amada Co., Ltd. (AMDLY), and Belden Inc. (BDC) are solid picks on that front.

Hitachi Ltd. (HTHIY)

Headquartered in Tokyo, HTHIY provides information technology, energy, mobility, and smart life solutions in Japan and internationally. The company operates through eight segments: information & telecommunication systems, social & industrial systems, electronic systems & equipment, construction machinery, high functional materials, automotive systems, smart life & eco-friendly, and others.

The company’s revenue from its energy segment was $7.27 billion for the nine months ended Dec. 31, 2020, which represents a 207.6% year-over-year gain. Its EBIT increased 817.1% year-over-year to $4.84 billion. HTHIY’s net income was $3.02 billion, representing a 264.2% year-over-year increase. Its EPS increased 457.5% year-over-year to $3.06.

Analysts expect HTHIY’s EPS to improve 169.4% year-over-year for the quarter ended March 31, 2021 to $1.67. Its revenue estimate of $19.51 billion for the quarter ending June 30, 2021 represents a 32.2% increase year-over-year.

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