Three Top Brands, Only One’s a Buy

Article Excerpt

These three well-managed industrial companies have come under pressure in the past few months, as rising costs for fuel, metals, plastics and labor have slowed their earnings growth. But they own some of the best-known brands in their fields, and they are all doing a good job cutting costs. Some like Stanley Works are taking advantage of the recent weakness in the manufacturing sector to make acquisitions. We like the long-term prospects of all three, but see only one as a buy right now. GENUINE PARTS CO. $43 (New York symbol GPC; Conservative Growth Portfolio, Manufacturing & Industry sector; WSSF Rating: Average) distributes over 320,000 automotive replacement parts through 1,200 company-owned stores and 4,800 independent dealers. It also distributes industrial parts, electronic equipment and office supplies. The automotive business supplies roughly half of its revenue and profit. Demand for replacement parts tends to be less cyclical than car sales, since it’s cheaper to repair an older vehicle than buy a new one. That helped the…

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