The U.S. manufacturing sector is making a solid rebound after months of struggle. Although supply constraints have shown signs of growing lately, manufacturing activity increased at a rapid pace in May after growing in the past three months.
So far, it has been an impressive show by the manufacturing sector in 2026. Higher prices remain a challenge, but robust demand has been boosting manufacturing activity.
Given the positive sentiment, it would be ideal to invest in four stocks from the manufacturing sector — Helios Technologies, Inc. HLIO, Luxfer Holdings PLC LXFR, RBC Bearings Incorporated RBC and Watts Water Technologies, Inc. WTS — that we have detailed below.
Manufacturing Activity Grows Steadily
The ISM Manufacturing PMI jumped to 54 in May, to hit its highest level in four years, after increasing to 52.7 in April. May’s reading also surpassed analysts’ expectations of the PMI rising to 53.
Any reading above 50 suggests an expansion. This was also the fifth straight month that the PMI was above the 50 reading, indicating that the sector is on track for a steady recovery. President Donald Trump’s aggressive tariffs weighed on manufacturing activity last year, but the sector has still managed to grow owing to robust demand.
Sixteen industries reported growth in May, led by textile mills. Also, other industries like electrical equipment, paper products and appliances grew at an impressive pace last month. Although tariffs remain a concern, the New Orders Index grew for the fifth straight month, with a reading of 56.8%, up 2.7% from 54.1% in April. The Production Index came up with a reading of 54.3%, increasing 0.9% sequentially.
Oil prices have surged nearly 40% since the beginning of the Iran war, which has resulted in a spike in inflation. However, investors are hopeful that a deal with Iran could be reached soon after Trump hinted at making a decision on ending the war.
4 Industrial Products Stocks With Upside
Helios Technologies
Helios Technologies, Inc. is an industrial technology company. HLIO develops and manufactures hydraulic and electronic control solutions. Helios Technologies’ operating subsidiaries include Sun Hydraulics, Enovation Controls and Faster Group.
Helios Technologies’ expected earnings growth for the current year is 12.9%. The Zacks Consensus Estimate for next year's earnings has improved 4% over the past 60 days. Currently, HLIO has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Luxfer Holdings
Luxfer Holdings PLC is a materials technology company specializing in the design, manufacture and supply of high-performance materials, components and gas cylinders. LXFR had two divisions, Elektron and Gas Cylinders. The Elektron division focuses on specialty materials based on magnesium, zirconium and rare earths. The Gas Cylinders division manufactures products made from aluminum, composites and other metals using technically advanced processes.
Luxfer Holdings’ expected earnings growth for the current year is 8.1%. The Zacks Consensus Estimate for next year's earnings has improved 7.1% over the past 60 days. LXFR currently sports a Zacks Rank #1.
RBC Bearings Incorporated
RBC Bearings Incorporated manufactures and distributes engineered bearings and precision components. RBC’s bearings are tools that reduce damage and energy loss, and enable proper power transmission in most machines and mechanical systems.
RBC Bearings’expected earnings growth for the current year is 14.2%. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the past 60 days. RBC has a Zacks Rank #2 at present.
Watts Water Technologies
Watts Water Technologies, Inc. designs, manufactures and sells various water safety and flow control products to promote safety, energy efficiency, and water conservation for commercial and residential buildings.
Watts Water Technologies’ expected earnings growth for the current year is 12.5%. The Zacks Consensus Estimate for current-year earnings has improved 2.2% over the past 60 days. WTC has a Zacks Rank #2 at present.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
RBC Bearings Incorporated (RBC): Free Stock Analysis Report
Watts Water Technologies, Inc. (WTS): Free Stock Analysis Report
Luxfer Holdings PLC (LXFR): Free Stock Analysis Report
Helios Technologies, Inc (HLIO): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).