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Ingersoll-Rand (IR): It's time for Industrials

"We like to invest in the strongest sectors and we think Industrials are on their way to the top," note Ron Rowland and Brandon Clay in All Star Investor.

The advisors explain, "Surveying the horizon of industrial companies, the most promising is Bermuda-based, Ingersoll-Rand (NYSE: IR). This is a stock you want for the next 12 months."

"The stock market is a leading indicator; it starts to decline before the economy slows down, and it starts to advance well before the economy improves. These lags often results in a stock market that starts moving up just when the public becomes 'convinced' that the problems are serious.

"Economic reports are likely to get worse. Housing foreclosures are likely to increase. Many more employees are likely to be let go. These are the perceptions that currently haunt investors.

"However, these are often the very same perceptions that create bottoms in the stock market. It is hard to see how the economy will crawl out of this mess, but eventually it will. The groundwork is now being laid.

"It may seem counter-intuitive, but investors should start planning for the next expansionary cycle. Markets move well ahead of facts, and it's time to invest accordingly. And indeed, industrials have risen in our rankings in recent weeks.

"A global leader of broad-based equipment offerings, Ingersoll-Rand is positioned to capitalize on the next phase of development like no other company in its sector. Here's why.

"Currently taking in $14.4 billion a year with a $12 billion market capitalization, Ingersoll-Rand is a gem of a company. In recent years, they have streamlined their historically heavy machinery product lines into goods more profitable in a global economy.

"Think golf carts for Dubai's oil sheiks, industrial refrigerators for China's growing urban population, locks for new commercial property in burgeoning Latin America. IR has positioned itself by offering hard goods to areas that need them most.

"And they're eyeing even more opportunities abroad. Ingersoll Rand recently opened up a 100,000 sq. ft. engineering facility on the outskirts of Bangalore, India. This move demonstrates their dedication to cost-effective research and development.

"IR's recent acquisition of Trane's HVAC business underscored their commitment to expand global services. They knows that China and India have millions of workers who would rather work in air-conditioned factories than in sweat shops. These cash-rich countries can finally afford such amenities. Ingersoll Rand will be there to fill the orders.

"Ingersoll-Rand is a 100+ year old company. It has weathered tumultuous markets before. It will weather them again. Note, that our 'pick of the week' is usually intended for aggressive investors. Don't risk money you can't afford to lose. You will need to decide when (and if) it is time to sell."

Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.

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Last updated: July 06, 2008: 04:40 AM

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