Industrials businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. But they are at the whim of volatile macroeconomic factors that influence capital spending (like interest rates), and the market seems convinced that demand will slow. Due to this bearish outlook, the industry has tumbled by 1.4% over the past six months. This drop was discouraging since the S&P 500 returned 1.9%.
Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. Taking that into account, here is one industrials stock boasting a durable advantage and two that may face trouble.
Two IndustrialsStocks to Sell:
Quest Resource (QRHC)
Market Cap: $44.47 million
Recycling corporate waste to help companies be more sustainable, Quest Resource (NASDAQ: QRHC) is a provider of waste and recycling services.
Why Are We Out on QRHC?
- Sales were flat over the last two years, indicating it’s failed to expand this cycle
- Free cash flow margin shrank by 9 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
Quest Resource’s stock price of $2.15 implies a valuation ratio of 6.1x forward P/E. If you’re considering QRHC for your portfolio, see our FREE research report to learn more.
Schneider (SNDR)
Market Cap: $4.19 billion
Employing thousands of drivers across the country to make deliveries, Schneider (NYSE: SNDR) makes full truckload and intermodal deliveries regionally and across borders.
Why Should You Sell SNDR?
- Annual sales declines of 8.5% for the past two years show its products and services struggled to connect with the market during this cycle
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 10% annually
- Waning returns on capital imply its previous profit engines are losing steam
Schneider is trading at $23.92 per share, or 24.4x forward P/E. Check out our free in-depth research report to learn more about why SNDR doesn’t pass our bar.
One Industrials Stock to Watch:
Griffon (GFF)
Market Cap: $3.18 billion
Initially in the defense industry, Griffon (NYSE: GFF) is a now diversified company specializing in home improvement, professional equipment, and building products.
Why Are We Positive On GFF?
- Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- Incremental sales over the last five years have been highly profitable as its earnings per share increased by 32.6% annually, topping its revenue gains
- Free cash flow margin jumped by 10 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $67.68 per share, Griffon trades at 11.3x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
