Shares of about 10 large industrial manufacturers and distributors, such as Caterpillar Inc (>> Caterpillar Inc.), Parker-Hannifin Corp (>> Parker-Hannifin Corp) and Eaton Corp Plc (>> Eaton Corporation PLC), have climbed between roughly 5 percent and 15 percent this year, although most have not recouped significant declines they suffered in 2015.

In an extreme example, shares of mining equipment maker Joy Global Inc (>> Joy Global Inc.) have jumped about 25 percent in 2016. That may seem impressive, but after last year's plunge of more than 70 percent, Thursday's price of about $15.50 is only about a quarter of the stock's high in 2014.

The industrials group broke ahead of the broader market in early February. The Standard & Poor's industrial sector index <.SPLRCI> is off about 1 percent for 2016, but that is better than the 3.3 percent decline for the S&P 500 <.SPX>.

Analysts pointed to various factors that could be supporting industrial shares: improving U.S. manufacturing indicators, stabilizing markets for oil and other commodities, and the weakening of the dollar, whose strength has undermined the competitiveness of U.S. manufacturers and the value of their foreign sales.

But it is not clear whether some struggling industries that are customers of these manufacturers, such as energy and mining, will strengthen or support growth.

"This was a quick catch-up, and I think you have to be really cautious as an investor not to assume that this resurgence is going to continue," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

Just before earnings season got into full swing in late January, Robert W. Baird analyst Mig Dobre determined that the eight diversified manufacturers he covers were trading an average of 16 percent below their 200-day moving average, while seven machinery stocks were 27 percent below that mark.

The stocks may no longer be so "oversold," Dobre said, so any new investors could be "hoping for real recovery and growth.

"It’s too early to call for a more meaningful turn," he added.

Large industrials, including aviation and transportation stocks, have as a group traded at a discount to the S&P 500 since late 2014, but the gap has shrunk in recent weeks. The sector is now at 15.2 times forward earnings estimates against 16.1 times for the broader S&P.

Chicago-based North Star Investment Management holds a disproportionate amount of industrial shares, finding them still undervalued, said Chief Investment Officer Eric Kuby.

North Star has been adding to some positions recently, including Graham Corp (>> Graham Corporation). Shares of the small supplier of heat transfer equipment to the energy industry have risen some 15 percent this year after falling more than 40 percent in 2015.

"I think this is a pretty good time to buy the industrial companies," Kuby said.

(Reporting by Lewis Krauskopf; Editing by Linda Stern and Lisa Von Ahn)

By Lewis Krauskopf