Laser Focus World is an industry bedrock—first published in 1965 and still going strong. We publish original articles about cutting-edge advances in lasers, optics, photonics, sensors, and quantum technologies, as well as test and measurement, and the shift currently underway to usher in the photonic integrated circuits, optical interconnects, and copackaged electronics and photonics to deliver the speed and efficiency essential for data centers of the future.

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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

3 Industrials Stocks in Hot Water

HTZ Cover Image

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 1.7% over the past six months. This drop was disappointing since the S&P 500 climbed 5.1%.

A cautious approach is imperative when dabbling in these companies as the losers can be left for dead when the cycle naturally turns and the winners consolidate. Keeping that in mind, here are three industrials stocks best left ignored.

Hertz (HTZ)

Market Cap: $1.28 billion

Started with a dozen Model T Fords, Hertz (NASDAQ: HTZ) is a global car rental company providing vehicle rental services to leisure and business travelers.

Why Do We Steer Clear of HTZ?

  1. Underwhelming unit sales over the past two years imply it may need to invest in improvements to get back on track
  2. Waning returns on capital imply its previous profit engines are losing steam
  3. Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders

Hertz’s stock price of $4.16 implies a valuation ratio of 3.4x forward EV-to-EBITDA. To fully understand why you should be careful with HTZ, check out our full research report (it’s free).

Markforged (MKFG)

Market Cap: $52.79 million

Beginning as a start-up at SolidWorks World–an annual design and engineering conference, Markforged (NYSE: MKFG) offers 3D printers and softwares to manufacturers of various industries.

Why Does MKFG Fall Short?

  1. Sales tumbled by 5.8% annually over the last two years, showing market trends are working against its favor during this cycle
  2. Costs have risen faster than its revenue over the last five years, causing its operating margin to decline by 56.1 percentage points
  3. Free cash flow margin shrank by 38.7 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

Markforged is trading at $2.56 per share, or 0.5x forward price-to-sales. If you’re considering MKFG for your portfolio, see our FREE research report to learn more.

Scorpio Tankers (STNG)

Market Cap: $1.84 billion

Operating one of the youngest fleets in the industry, Scorpio Tankers (NYSE: STNG) is an international provider of marine transportation services, specializing in the shipment of refined petroleum.

Why Does STNG Give Us Pause?

  1. Performance surrounding its total vessels has lagged its peers
  2. Projected sales decline of 22.9% over the next 12 months indicates demand will continue deteriorating
  3. Earnings per share have dipped by 5.7% annually over the past two years, which is concerning because stock prices follow EPS over the long term

At $39.41 per share, Scorpio Tankers trades at 5.5x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than STNG.

Stocks We Like More

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Get started by checking out 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 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.

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