Three Industrial Picks

On the back of my outstanding success picking my last industrial stocks, I thought I'd stick my neck out and give it a go again. This time won't be so easy, but each company has a lot going for it.

1. Emerson Electric Co (NYSE: EMR)

When I mention this company I always start by saying they make InSinkErator. Everyone knows that name, right? But they make so much more, this is a true industrial giant. The great Ben Graham liked this company and he goes on about them in his seminal book The Intelligent Investor. Think margin of safety here. There isn't much to go wrong. But over time your investment will grow in value if you hold and buy low enough. They're not real cheap, but with a P/E of 14.33, they're not expensive either.

2. Oshkosh Corp (NYSE: OSK)

Not a clothing brand. They make trucks, fire and access equipment, military gear, waste trucks. Think of those glorious airport fire tenders, or the front loading waste trucks, they make them. But also army trucks. There's a lot to like about this business, they make quality stuff. Their dividend yield is not as good as Emerson though, so go underweight in them for that reason.

3. Trinity Industries Inc (NYSE: TRN) 

Based in Dallas Texas, you never hear this company talked about. It's a great business. They make railway equipment, inland barges, and expanded shale for lightweight concrete. They also make transport equipment, such as those roadside barriers. This last area is where the story gets interesting, a private prosecution was successful (subject to appeal no doubt) in proving their Texas A&M engineering designed barriers were unsafe. Now I'm not going to say whether the result was correct or not, simply because I don't know. But what is worth mentioning here is that news like that punishes a company hard, and they're bleeding while still remaining profitable and comfortably so. They sit on a P/E of 3.99 at present. Can you believe that? What about buying the whole thing, lock stock? It's a bargain with a market capitalisation under 3 billion. Realistically that would work out at 5 as any takeover would lift the price. 

(Note: These opinions are information only and do not constitute investment advice. If you need investment advice on these stocks or anything else for that matter, talk to your recognised and professional investment adviser. Better still, do your own research and act on it confident in your own ability.)