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 1.8%. This performance was disheartening since the S&P 500 held steady.

Only some companies are subject to these dynamics, however, and a handful of high-quality businesses can deliver earnings growth in any environment. Keeping that in mind, here is one industrials stock boasting a durable advantage and two we’re steering clear of.

Two IndustrialsStocks to Sell:

Rush Enterprises (RUSHA)

Market Cap: $3.96 billion

Headquartered in Texas, Rush Enterprises (NASDAQ: RUSH.A) provides truck-related services and solutions, including sales, leasing, parts, and maintenance for commercial vehicles.

Why Are We Out on RUSHA?

1. Sales trends were unexciting over the last two years as its 2.2% annual growth was below the typical industrials company
2. Estimated sales decline of 1.5% for the next 12 months implies a challenging demand environment
3. Earnings per share have dipped by 10% annually over the past two years, which is concerning because stock prices follow EPS over the long term

Rush Enterprises’s stock price of $50.50 implies a valuation ratio of 8.1x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than RUSHA.

Avery Dennison (AVY)

Market Cap: $13.81 billion

Founded as Kum Kleen Products, Avery Dennison (NYSE: AVY) is a manufacturer of adhesive materials, display graphics, and packaging products, serving various industries.

Why Should You Sell AVY?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Free cash flow margin shrank by 3.7 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
3. Eroding returns on capital suggest its historical profit centers are aging

Avery Dennison is trading at $176.60 per share, or 17.2x forward P/E. If you’re considering AVY for your portfolio, see our FREE research report to learn more.

One Industrials Stock to Watch:

Core & Main (CNM)

Market Cap: $11.17 billion

Formerly a division of industrial distributor HD Supply, Core & Main (NYSE: CNM) is a provider of water, wastewater, and fire protection products and services.

Why Are We Positive On CNM?

1. Market share has increased this cycle as its 17.1% annual revenue growth over the last five years was exceptional
2. Operating margin improvement of 3.8 percentage points over the last five years demonstrates its ability to scale efficiently
3. Share buybacks catapulted its annual earnings per share growth to 19.2%, which outperformed its revenue gains over the last two years

At $58.90 per share, Core & Main trades at 23.8x forward P/E. Is now the right time to buy? 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-micro-cap company Tecnoglass (+1,754% 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