Piper Sandler says to buy these 14 stocks set to get a boost from a strong manufacturing cycle

• Piper Sandler forecasts a cyclical boom and advises buying manufacturing-sensitive stocks.
• Manufacturing data shows further expansion is likely ahead.
• Stocks Piper Sandler is bullish on include Ford, Dillard's, UPS, and more.

All signs point to a cyclical boom ahead, according to Piper Sander's top strategist, Michael Kantrowitz — and the firm says it "strongly" advises investors to load up on stocks best positioned to benefit from the shift.

"We continue to recommend investors overweight their portfolios with stocks sensitive to the ISM (across all sectors) as we expect there is a lot more alpha left in the next year or so as PMIs rebound, and the business cycle broadens out," Kantrowitz wrote in a client note Tuesday. ISM and PMI refer to the Institute for Supply Management's Purchasing Manager Indexes, which provide various gauges for measuring manufacturing activity.

Seventy percent of PMIs are now expanding, the note showed, having recently crossed the 50% threshold. In every instance when that has happened, going back to the 1970s, it has hit 100%, suggesting manufacturing activity has further room to pick up.

This is important because manufacturing data leads earnings breadth, Kantrowitz said. If factories are humming, so is earnings growth, and by extension, stocks.

On top of all of this, further rate cuts likely lie ahead with the job growth still relatively tepid, the note said. Rate cuts help stimulate economic activity by making it cheaper for firms to borrow.

With a compelling bull case for cyclical stocks ahead, Kantrowitz shared a list of stocks most sensitive to ISM Manufacturing data.

Below are the 14 on the list that are both among the highest correlated to ISM data and which are in the top decile of Piper Sandler's "Macro Select" framework, which it uses to rate the attractiveness of a stock at a given moment. The stocks' sectors and correlation to the ISM Manufacturing Index are included.