“And some of the manufacturing plants, chemical plants and steel makers are huge beneficiaries.”
As a result, Muggia expects a renaissance in domestic manufacturing. “And it’s happening right here in the US.”
Although Muggia says you can play the theme with a broad range of industrial companies tied to manufacturing he likes playing the theme with the following:
“They take energy feedstock and convert it into useful products like plastics and PVC pipe. So their costs go down (due to lower nat gas prices) while pricing has been solid. That should lead to huge earnings growth,” says Muggia.
Muggia believes that renaissance in manufacturing mentioned above will help this company recapture lost business. “15% was lost to outsourcing,” he says. But companies are coming back to the US.
“It’s big leasing company that benefits from a resurgence in manufacturing. It’s a levered play at the beginning of an upcycle.”
And on a related note, Muggia is also bullish on truckers as a derivative on the housing recover. “JB Hunt is the class act of the group,” he says.
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Trader disclosure: On April 17, 2012 , the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Karen Finerman owns HPQ; Joe Terranova owns IBM; Guy Adami owns INTC
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Sterne, Agee & Leach, Inc. makes a market in the following subject company: IBM
Sterne, Agee & Leach, Inc.’s research analysts receive compensation that is based upon various factors, including Sterne, Agee & Leach, Inc.’s total revenues, a portion of which is generated by investment banking activities.
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