PPI: Who Has the Pricing Power?
Producer prices up 1 percent in March – Yahoo! News
Overall producer prices rose 3.2 percent from March a year ago, the biggest climb since a 3.8 percent 12 month gain to August 2006.However, core producer prices rose 1.7 percent from the same period 12 months ago, down from a 1.8 percent year-over-year rise in February.
That’s all well and good, but also well reported. However, we like to dig a little deeper and see which industries are benefitting from pricing power, as it could help us identify interesting stock ideas. The PPI charts are from the Bureau of Labor Statistics and presented as the year/year percentage change in price.
Highlight: Anyone know a good pure play in the turbine business?
Fruit and vegetable canners have pricing power:
And it still isn’t showing up in Del Monte’s (DLM - Annual Report) stock price:
Corrugated box prices are getting weaker:
Which may be a signal that demand for them – say, from FedEx (FDX - Annual Report) – is weak:
Given what’s happening to chemical pricing:
We think Dow (DOW) should be more receptive to buyout talks.
All the buyers for industrial valves:
Should be good for Curtiss Wright (CW - Annual Report).
Scarily for DELL (DELL) and Hewlett Packard (HPQ - Annual Report), computer pricing may only get worse.
Finally, semiconductor prices have taken a turn for the worse.
That should be enough to chew on over the weekend.
Disclosure: William Trent has a long position in SMH.
Like this article? Why not try out:
[...] On Friday we’ll get PPI. While the headline figures are estimated to be 0.7% higher for all goods and 0.2% higher excluding food and energy, as usual we’ll focus more on the implications for individual companies and industries. [...]
[...] commented at length about the A380 problems and I’ve also noted the extraordinary pricing power enjoyed by turbine makers. If the company could start hitting on all cylinders it might be a strong [...]