Whether you see them or not, industrials businesses play a crucial part in our daily activities. Unfortunately, this role also comes with a demand profile tethered to the ebbs and flows of the broader economy, and investors seem to be forecasting a downturn - over the past six months, the industry has pulled back by 5.9%. This drawdown is a far cry from the S&P 500’s 5.3% ascent.
The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. Keeping that in mind, here is one resilient industrials stock at the top of our wish list and two we’re steering clear of.
Two industrials stocks to sell:
NN (NNBR)
Market cap: $348.7 million
Formerly known as Nuturn, NN (NASDAQ:NNBR) provides metal components, bearings, and plastic and rubber components to the automotive, aerospace, medical, and industrial sectors.
Why Is NNBR Risky?
- Sales stagnated over the last five years and signal the need for new growth strategies
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
At $3.78 per share, NN trades at 27.1x forward P/E. Read our free research report to see why you should think twice about including NNBR in your portfolio.
Whirlpool (WHR)
Market cap: $2.08 billion
Credited with introducing the first automatic washing machine, Whirlpool (NYSE:WHR) is a manufacturer of a variety of home appliances.
Why Should You Sell WHR?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 7.9% annually over the last five years
- Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 66.2% annually, worse than its revenue
Whirlpool’s stock price of $31.37 implies a valuation ratio of 10.5x forward EV-to-EBITDA. To fully understand why you should be careful with WHR, check out our full research report (it’s free).
One industrials stock to buy:
Fastenal (FAST)
Market cap: $60.29 billion
Founded in 1967, Fastenal (NASDAQ:FAST) provides industrial and construction supplies, including fasteners, tools, safety products, and many other product categories to businesses globally.
Why Is FAST a Top Pick?
- Offerings are mission-critical for businesses and result in a best-in-class gross margin of 45.3%
- Highly efficient business model is illustrated by its impressive 20.5% operating margin
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
Fastenal is trading at $52.80 per share, or 37.6x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks we like even more
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.