Even if they go mostly unnoticed, industrial businesses are the backbone of our country. 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 10.7% over the past six months. This drawdown was worse than the S&P 500’s 1.9% loss.

The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. With that said, here is one industrials stock poised to generate sustainable market-beating returns and two we’re steering clear of.

Two Industrials Stocks to Sell:

Transcat (TRNS)

Market Cap: $857.4 million

Serving the pharmaceutical, industrial manufacturing, energy, and chemical process industries, Transcat (NASDAQ: TRNS) provides measurement instruments and supplies.

Why Are We Cautious About TRNS?

1. Subpar operating margin of 7.1% constrains its ability to invest in process improvements or effectively respond to new competitive threats
2. Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its decreasing returns suggest its historical profit centers are aging
3. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned

Transcat is trading at $92.04 per share, or 40.2x forward P/E. To fully understand why you should be careful with TRNS, check out our full research report (it’s free).

Expeditors (EXPD)

Market Cap: $15.65 billion

Expeditors (NYSE: EXPD) offers air and ocean freight as well as brokerage services.

Why Is EXPD Risky?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 14.1% annually over the last two years
2. Earnings per share have dipped by 11.3% annually over the past two years, which is concerning because stock prices follow EPS over the long term
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

At $114.28 per share, Expeditors trades at 21.1x forward P/E. Dive into our free research report to see why there are better opportunities than EXPD.

One Industrials Stock to Buy:

Byrna (BYRN)

Market Cap: $582.3 million

Providing civilians with tools to disable, disarm, and deter would-be assailants, Byrna (NASDAQ: BYRN) is a provider of non-lethal weapons.

Why Are We Bullish on BYRN?

1. Market share has increased this cycle as its 40.2% annual revenue growth over the last two years was exceptional
2. Incremental sales significantly boosted profitability as its annual earnings per share growth of 99.2% over the last two years outstripped its revenue performance
3. Free cash flow profile has moved into break even territory, indicating the company has achieved financial self-sustainability

Byrna’s stock price of $25.98 implies a valuation ratio of 40.2x forward EV-to-EBITDA. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.

Stocks We Like Even More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Strong Momentum 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.