PPI: Behind the Headlines
The stock market is purportedly worried by today’s higher than expected producer price inflation headline number, as investors become concerned that Goldilox will burn her lips on some hot porridge. We, on the other hand, take our usual look behind the headline numbers to see which industries are potential winners and losers in the current inflation environment.
Does rising inflation for fruit and vegetable canning suggest it is finally time to buy Del Monte (DLM - Annual Report)?
Price increases in corregated boxes had previously been at odds with bad news from trucking companies. Now it looks like box prices may be rolling over.
Industrial gas prices continue to plummet. Are Air Products (APD) and Praxair (PX) defying gravity?
With aluminum prices rising, will Alcoa (AA) shares follow?
The way industrial valve prices are rising, it is no surprise Curtiss Wright (CW - Annual Report) stock is as well.
Railroads may be running out of steam.
Last but not least, telecom pricing is going through the roof.
Which leads us to ask: why, again, is Verizon getting rid of its lines?
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[…] Bill Trent of Stock Market Beat presents, PPI: Behind the Headlines. Who says you can’t get stock ideas from government statistics? […]
[…] PPI: Behind the Headlines […]
[…] Does it work? Well, anecdotes and evidence are two different things - but anecdotally last month’s post got off to a good start. We showed the (then-current) chart on fruit and vegetable canning inflation (the now current is below) and asked if it might signal that it is finally time to buy Del Monte (DLM - Annual Report). […]
[…] Analysts had been expecting the company to earn $0.53 on $2.5 billion in sales. In our preview of the earnings, we said there was “possible upside to sales.” We were right, as sales came in at $22.6 billion without adjusting for the discontinued operations. According to the company: Revenues for Verizon Telecom’s consumer market decreased by 3.5 percent, to $4.2 billion, comparing first quarter 2007 with first quarter 2006. However, in legacy Verizon markets, consumer revenues reversed recent year-over-year declines. (Legacy Verizon consumer markets exclude former MCI consumer markets - where Verizon’s strategic focus has led to expected declines.) We saw that coming as well. Back in January we noticed that telecom pricing was going through the roof, and said “Which leads us to ask: why, again, is Verizon getting rid of its lines?” […]