Filed Under:
Tickers in this Article: GLW, USG, M, DELL
As the consumer starts spending again, companies of many types and in many industries will benefit. Some obvious examples are department store chains like Macy's (NYSE:M), which sells apparel and other items, and computer makers like Dell, Inc. (Nasdaq:DELL). However, there are some other companies that make components or products that go into finished items that deserve a look too.

IN PICTURES: Top 8 Estate Planning Mistakes

The Big Picture
One company that comes to mind is Corning (NYSE:GLW), which is based in New York State. Corning stands out because of its foothold in LCD television glass. Very simply, demand for the company's products will see increasing ramp up in years to come.

Corning has done an exceptional job in the earnings front, in spite of one of the harshest operating environments in my memory. Specifically, Corning has consistently beat estimates, quarter in and quarter out, over the trailing four quarters, which is clearly both noteworthy and impressive. What's more is that it is expected to show impressive growth in the years ahead. Wall Street expects it to earn $1.76 per share this year and $1.92 per share next year, which implies an expected bottom line EPS growth rate of about 9% during that period.

Not the only Behind the Scenes Player Worth a Look
While not in the electronics business, and perhaps not the most sexy story, Wall Street USG Corporation (NYSE:USG) is worth keeping a close eye on. For those not familiar with the company, USG sells building materials of all types ranging from joint compound to wall boards. Very simply, over time as building picks up, demand for its products should increase nicely. Note that even if new houses aren't built in extremely large quantities, demand for its products could be strong, as existing homeowners refurbish their existing homes. (Take a look at Big Dividends in Oil and Gas for stocks that will also benefit in an economic rebound.)

Another interesting tidbit about this company is that an insider bought 12,500 shares toward the latter part of last year, at $13.93-14.50. The fact that the executive was willing to lay out that type of money says something about his optimism for the future.

The downside is that USG isn't expected to make money this year or next, so short-term investors be forewarned.

The Bottom Line
While full-priced retailers (or manufacturers) of products that we use everyday can be a great way to play the economic rebound, keeping an eye on companies that make components seems to make sense. Both Corning and USG Corp seem to fit that bill. Longer-term, both companies have the potential to show meaningful earnings, in my opinion.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

comments powered by Disqus

Trading Center