Fisher Investments on Industrials

5

STAYING CURRENT: TRACKING SECTOR FUNDAMENTALS

 

 

It’s not enough to simply understand a sector’s structure and its drivers. To make forward-looking assessments, you must know how and where to monitor fundamentals impacting the sector most.

Industrials is a broad sector, so to help focus your analysis, this chapter highlights the most important and widely tracked metrics for monitoring the two most important drivers—corporate and government spending. A more comprehensive list detailing industry statistics and other good websites can be found in Appendix A. We’ll also touch on the most important metrics to watch on an industry-specific level as well.

WHAT TO WATCH

Combing through government and corporate releases for nuggets of data helps analysts glean what the current sector landscape is and how that might impact future sector performance. It’s not a crystal ball telling you what will definitely happen to a sector or an industry and how profitable it will be. And even if you had one, it wouldn’t necessarily translate perfectly into a forecast for stock prices over any specific time frame. Why is that?

The economic statistics analysts pore over are a snapshot of what has already happened. Remember, the stock market is a discounter of all widely known information and moves based on future expectations. Keep that in mind when evaluating economic statistics, otherwise you risk placing ill-guided importance on something no longer meaningful.

Additionally, that snapshot is frequently ...