1 Industrials Stock to Target This Week and 2 to Avoid

Whether you see them or not, industrials businesses play a crucial part in our daily activities. 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 11.8% over the past six months. This drop was worse than the S&P 500’s 2.2% loss.

Only some companies are subject to these dynamics, however, and a handful of high-quality businesses can deliver earnings growth in any environment. On that note, here is one resilient industrials stock at the top of our wish list and two we’re steering clear of.

Two IndustrialsStocks to Sell:

Alta (ALTG)

Market Cap: $162 million

Founded in 1984, Alta Equipment Group (NYSE: ALTG) is a provider of industrial and construction equipment and services across the Midwest and Northeast United States.

Why Should You Sell ALTG?

1. 5.8% annual revenue growth over the last two years was slower than its industrials peers
2. Negative free cash flow raises questions about the return timeline for its investments
3. Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders

Alta’s stock price of $4.88 implies a valuation ratio of 0.9x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why ALTG doesn’t pass our bar.

Proto Labs (PRLB)

Market Cap: $894 million

Pioneering the concept of online quoting and manufacturing for custom prototypes and low-volume production parts, Proto Labs (NYSE: PRLB) offers injection molding, 3D printing, and sheet metal fabrication for manufacturers in various industries.

Why Should You Dump PRLB?

1. Sales were flat over the last two years, indicating it’s failed to expand this cycle
2. Efficiency has decreased over the last five years as its operating margin fell by 7.3 percentage points
3. Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term

At $37.61 per share, Proto Labs trades at 25.5x forward P/E. Dive into our free research report to see why there are better opportunities than PRLB.

One Industrials Stock to Buy:

TransDigm (TDG)

Market Cap: $82.04 billion

Supplying parts for nearly all aircraft currently in service, TransDigm (NYSE: TDG) develops and manufactures components and systems for military and commercial aviation.

Why Do We Love TDG?

1. Existing business lines can expand without risky acquisitions as its organic revenue growth averaged 14.9% over the past two years
2. Incremental sales over the last two years have been highly profitable as its earnings per share increased by 30.8% annually, topping its revenue gains
3. Robust free cash flow margin of 19.7% gives it many options for capital deployment, and its recently improved profitability means it has even more resources to invest or distribute

TransDigm is trading at $1,461 per share, or 36.4x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

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 5 Growth Stocks for this month. 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.