Industrial Stocks – Why Are They So Popular?
As far as the stock market goes, the term “Industrials” brings to mind a list of companies whose stock’s price is determined by how much raw materials they use in production. Some examples of these industrial companies are Textron, Boeing, Raytheon and Caterpillar, just to name a few. Most of these companies do not trade on the major exchanges, but instead have smaller independent companies that trade on the Over the Counter Bulletin Board (OTCBB). In recent years these OTC stocks have become very popular to those investors looking for growth in a tight economy. But just what are these industries and what is the reason for their popularity?
There are a number of reasons why investors look to invest in industrials as an investment. One of these reasons is because the cost per unit of these stocks is less than other, more established, publicly traded companies. When you take into account that there is less of an initial public offering (or IPO) for these stocks, it only makes sense that investors would flock to the small cap companies.
Of course, the low cost of these stocks also works in favor of these stocks. Because there are so many of these smaller cap stocks, they have the potential for growth much faster than the larger, more popular stock. Investing in the metals or mining industries can be a good way to gain exposure to these industrials sector. The price of gold, silver and platinum is generally higher in the metals sectors than anywhere else, making them ideal investments for long term growth.