Uncovering a Hidden Gem in the Industrial Sector
May 13, 2025
Key Take-Aways From PSIMON
- PSIMON highlighted the insurance industry as very resilient to recent market turbulence.
- PSIMON flagged Chubb Ltd (CB), W.R. Berkley (WRB), and The Travelers Companies (TRV) as most resilient within that group.
Discover PSIMON’s Regime Intelligence
Using the Market Landscape tool, PSIMON ranks the Industrials sector (XLI) among those it predicts will underperform relative to the S&P 500 (using the Relative Forecast ranking method). Nevertheless, this sector is positioned fourth out of five sectors (4/5) with negative relative forecasts, indicating a lower level of conviction in this prediction. Furthermore, PSIMON labelled this sector in Regime 3 for 26 days before recently switching to Regime 2. This suggests that this sector’s volatility is stabilizing. It is worth noting that the median number of days that XLI spent in Regime 3 before this most recent sequence of 26 days was also 26 days, suggesting that regime survivability statistics (Days in Regime vs. Sequence Length in Days) has some useful predictive power.
PSIMON monitors 73 firms within the Industrials sector of the S&P 500. Given that this sector is not highly concentrated, it’s worth asking whether there could be firms among them that are compelling investment opportunities despite the sector’s recent high level of volatility and its negative Relative Forecast.
For the Industrial sector (XLI) on the Market Landscape, PSIMON showed a steady Relative Forecast direction of certain firms for an extended period. In fact, by sorting the firms in descending order based on “Days in Forecast Direction,” we see that the second-highest value comes from Howmet Aerospace (HWM) with a positive Relative Forecast for a consecutive 326 days. Clearly, this stock warrants further attention.
Since the beginning of 2024, HWM’s price has remained significantly above its 200-day moving average, even during the market disruptions of last April. The uncertainty surrounding the U.S. government’s tariff measures has certainly introduced greater volatility in HWM’s price, but the stock has rebounded well since then, continuing with its strong uptrend.
2025 Q1 Earnings[1]
On May 1st, HWM announced record revenues and robust growth in its Adjusted EPS, surpassing analyst consensus. Strong growth is also expected in upcoming quarters, and analysts consensus remain a Strong Buy.
PSIMON’s AI-Driven signals enable investors to quickly identify promising stocks and ETFs in any type of market conditions. Howmet Aerospace (HWM) is yet another example of a stock that is worth a closer look.
¹Data provided by https://www.barchart.com/
