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?

We have written about Watch List member Ceradyne’s (CRDN) balancing act as growth in body armor sales that have accounted for most of its recent revenue slow down at best and possibly decline. We noted the need to expand into new areas, and noted that the nuclear waste containment business could be such an outlet when the deal was first announced.

The company is moving forward much faster, and investing much more, than we had originally expected. It looks as though the technology has promise, and with energy prices fueling a renewed interest in nuclear power they may be on to something.

Ceradyne buys facility, product line to enter nuclear waste business: Financial News - Yahoo! Finance

Ceradyne Inc. plans to manufacture nuclear waste containment materials and it spent $14.1 million on an industrial facility, a new product line and manufacturing equipment for the project, the company said Thursday.

The company intends to manufacture the nuclear waster containment materials under an agreement with Alcan Inc., a Canadian aluminum producer, as part of the company’s diversification strategy.

In its first transaction, Ceradyne bought an 86,000-square-foot facility in Quebec, Canada. In a seperate purchase, the company bought a boron carbide and aluminum cladding product line called Boral, along with manufacturing equipment and inventory from AAR Manufacturing Inc.

We have discussed before how Ceradyne’s (CRDN) dependence on body armor sales to the US military poses a challenge to future growth. Such sales are set to plateu for several years and could even taper off or go away completely under certain circumstances. When we conducted a scenario analysis, we said that for the bullish case to materialize the company had to expand into significant new applications.

Today the company did just that by combining its ceramic materials with aluminum in an application that could have uses in nuclear waste containment or help the company crack the vehicle armor market. We don’t know if this is the new application that will sustain Ceradyne’s growth rate. But it is the type of new applications Ceradyne must explore if it expects to do so.
Ceradyne, Inc. Signs Agreement with Alcan Inc. to Provide Nuclear Waste Containment Systems: Financial News - Yahoo! Finance More »