Have you ever heard the phrase ensigns run the Navy? Neither have I. Time and again, the top military brass emphasizes that the chief petty officer (a senior enlisted rank) and above run the world’s finest fleet. Of course, this is not to besmirch the great contributions of Naval officers. But to be blunt, someone’s got to actually sail this ship and this brings me to blue-collar stocks to buy.
As you’ve undoubtedly heard, mainstream media headlines have inundated the population with stories about how college debt has soared. However, further research into the topic reveals that 78% of students graduate with less than $30,000 in debt. In addition, those with six-figure debt loads are extremely rare, accounting for less than half a percent. On paper, that doesn’t sound like a positive talking point for blue-collar stocks to buy.
And yes, the common narrative is that those with a college education will earn an average million dollars or so in extra lifetime income over those who didn’t get a degree. But the problem is that the world is changing. As The Atlantic argues, even a STEM (science, technology, engineering, math) degree is no guarantee of a stable future. Too much dependency on academia-based gimmickry could make us vulnerable, which cynically supports blue-collar stocks to buy.
For one thing, the work-from-home initiative that worker bees are celebrating right now is actually not for your benefit. Sincerely, I hope those who push coronavirus conspiracy theories also realize the conspiracy that’s staring them right in the face. Indian talent has long been in high demand, particularly in the U.S. tech sector. Now that work has been physically decentralized and distributed, high-paying jobs can now move abroad, again cynically boosting blue-collar stocks to buy.
Believe you me, with U.S. nonfinancial companies facing an $11.2 trillion debt load, there is almost no incentive for troubled firms to pay high STEM salaries. Since it’s my understanding that American math is the same as Indian math, only the salary differentials remain the key point of contrast. But even if a great outsourcing occurs, someone’s got to fix your toilet (and everything else). So here are some blue-collar stocks to buy.
- Home Depot (NYSE:HD)
- Sherwin-Williams (NYSE:SHW)
- Stanley Black & Decker (NYSE:SWK)
- Techtronic Industries (OTCMKTS:TTNDY)
- Huntington Ingalls Industries (NYSE:HII)
- AAR Corp. (NYSE:AIR)
- Kelly Services (NASDAQ:KELYA)
If the idea of Indian math being the same as our math presents a wake-up call, you should also realize that 10% of India’s population spoke English — in 2012. With education accelerating in India, the country may eventually be the biggest English-speaking country. So yeah, blue-collar stocks are incredibly relevant.
Blue-Collar Stocks to Buy: Home Depot (HD)
One of the safest blue-collar stocks to buy in the sense that while the underlying business of Home Depot caters to multiple blue-collar industries, HD itself represents a favorite among Wall Street big dogs — a decidedly white-collar outfit.
To be fair, HD isn’t off to the greatest start to the new year. Heading into the Friday session of the second week of 2022, shares are down over 5%. A common view is that much of the enthusiasm regarding record-breaking home prices is already baked into the stock. As a result, HD simply needs to work off some of the excess speculation, like you might need to walk off that sprinkled jelly doughnut you had for breakfast.
I’m not judging by the way — just making an analogy to promote clearer understanding of what may be happening.
Over time, though, I believe that many families will realize that the return on investment for a pricey college education is waning. On the flipside, technical hands-on work has never been more in demand — and that’s before the pandemic. Post-crisis, the outlook is very encouraging for blue-collar stocks to buy.
Sherwin-Williams (SHW)
Another one of the blue-collar stocks to buy that isn’t off to the most auspicious of starts in the new year, Sherwin-Williams is incurring a performance a bit worse than Home Depot’s, down over 6%. As with the home-improvement retailer, Sherwin-Williams could be suffering from a correction based on forward-looking sentiment for the housing market.
At the same time, the company also provided guidance that shook up investors in pre-market trading heading into the Friday, Jan. 14 session. While fourth-quarter sales remain on track to hit the consensus target, SHW expects earnings-per-share to slip to $1.35, substantially lower than the consensus estimate of $1.68.
Management noted that supply chain woes affected material availability, greatly impacting its Americas operation. Also, Sherwin-Williams suffered from pandemic-related labor shortages in December. Still, the latter may be a temporary issue in the long run.
Sure, the company’s paint-and-coating specialty isn’t exactly groundbreaking stuff. However, how many people do we need to perform concatenating functions in Excel spreadsheets? Again, Indian Excel is the same as American Excel, as far as I know.
Blue-Collar Stocks to Buy: Stanley Black & Decker (SWK)
While the other two blue-collar stocks incurred less-than-ideal trading to ring in the new year, Stanley Black & Decker is quite the opposite. Instead of 5% down, it’s 5% up heading into the final day of the second week of 2022. Better yet, this may be one of the fundamentally more viable ideas in this segment.
No, SWK is probably not going to make you rich. However, Stanley Black & Decker is a ticket-selling investment. What I mean is that you’re not placing a bet on which team is going to win the game. Instead, you’re selling tickets to the match-up. Certainly, it doesn’t have the payout of a big wager turning true. However, you’re much likelier to enjoy slow, steady gains.
A report came out a few years back that U.K. millennials aren’t very savvy with manual work — thus, the DIY concept hasn’t gained traction there. I think it’s safe to say that a similar conundrum affects American millennials. While that may not endear us to other nations that are DIY friendly, here’s the point: It’s a great backdrop for blue-collar stocks to buy like SWK. Expectational standards have never been lower for blue-collar workers, meaning if you’re somewhat competent, you can make a killing.
Techtronic Industries (TTNDY)
While you may not have heard about Techtronic Industries, you’ve undoubtedly seen some of the company’s wholly owned and licensed brands. We’re talking about power tools from the likes of Milwaukee and Ryobi and vacuum cleaners from Hoover. Indeed, Techtronic covers a wide range of products, from power equipment to outdoor products (lawn mowers, leaf blowers, etc.) to floorcare and cleaning.
Now, to be 100% transparent, Techtronic is off to a very poor start on a year-to-date basis, shedding a worrying 11%. Absolutely, you don’t want to engage TTNDY stock with an excessive position if you’re uncomfortable with heavy risk. That said, over the long run, shares could turn out to be a discounted opportunity in a similar vein to other blue-collar stocks to buy.
I look at the booming dog-walking industry as an example. Decades ago, who would have thought such a service would be a thing, at least to this magnitude? Well, it is, in part because there’s massive demand for workers willing to do, you know, work. Thus, TTNDY with enough patience could turn out to be a winner, if only because so many of us don’t want to get our hands dirty.
Blue-Collar Stocks to Buy: Huntington Ingalls Industries (HII)
I guess I can’t lead off this list of blue-collar stocks to buy with a Navy-related joke without tipping the cap to Huntington Ingalls Industries. While the public pictures a warship being commanded by a captain in their white uniform, the reality is that you can’t get those things dirty. But someone has to actually build the ships that comprise the fleet, which is where Huntington Ingalls Industries comes in.
I’ve spoken about HII a number of times in prior InvestorPlace publications. To be blunt, HII shares haven’t performed as well as I would like. Still, over the long run, I believe the underlying company will become incredibly relevant. It already is as America’s largest military shipbuilding company. With the rise of China and its increasing flexing of military prowess, the Navy has no choice but to respond.
And while a nomination to the U.S. Naval Academy is one of this nation’s highest honors, the reality in the military may be akin to the corporate world: We don’t need that many Excel spreadsheet specialists (or whatever is the military equivalent to that).
Instead, we need real workers and that sentiment couldn’t be more pressing for certain blue-collar stocks to buy like HII.
AAR Corp. (AIR)
Among the worst-hit blue-collar stocks to buy when the Covid-19 pandemic struck, AAR Corp. looked utterly disastrous in the immediate aftermath. With government agencies around the world implementing strict mitigation measures, the once-friendly skies stood eerily silent. Naturally, that was bad for business, especially if your business centered on airframe parts, maintenance and engineering services.
But after months of intense restrictions, consumers simply had enough. With signs pointing to Covid-19 becoming endemic (as in an infectious condition that occurs seasonally but with less-damaging consequences), people have become more acclimated to the new normal. Add in the concept of retail revenge, or the opening of wallets to make up for lost time and you have a backdrop where travel is poised to bounce back significantly.
When that happens, AIR could be one of the best-performing blue-chip stocks to buy. While you shouldn’t read too much into short-term data, AAR Corp. is off to a great start to the new year, up nearly 6% YTD. Plus, since the company serves the aircraft industry, it features a wider addressable market than an individual airline firm.
Blue-Collar Stocks to Buy: Kelly Services (KELYA)
As a staffing agency, Kelly Services is not directly an investment within blue-chip stocks to buy. However, many if not most staffing agencies cater to white-collar services, such as business management and accounting. I’m not saying those services are not important. However, as the globalized economy begins outsourcing such work to other capable (and in some cases English-speaking) nations with lower cost structures, white collars may soon run out of necks to wrap around.
What makes Kelly Services different, then, is it features a viable professional and industrial jobs segment. As its website states, the burgeoning Industry 4.0 requires blue-collar workers to manage automation-related equipment. Because so many young people are sold an inaccurate picture about the ROI of a college education, demand for blue-collar services only gets stronger.
Therefore, Kelly could see this segment turn quite lucrative over the next several years as the above realization kicks in. To be fair, KELYA has been pretty rough compared to other blue-collar stocks, down 16% over the trailing year. Still, with patience, shares could easily surprise onlookers.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.