Even if they go mostly unnoticed, industrial businesses are the backbone of our country. Their momentum is also rising as lower interest rates have incentivized higher capital spending. As a result, the industry has posted a 45.4% gain over the past six months, beating the S&P 500 by 12.7 percentage points.
Regardless of these results, investors should tread carefully. The diversity of companies in this space means that not all are created equal or well-positioned for the inescapable downturn. On that note, here is one industrials stock boasting a durable advantage and two best left ignored.
Two Industrials Stocks to Sell:
Lucid (LCID)
Market Cap: $7.61 billion
Founded by a former Tesla Vice President, Lucid Group (NASDAQ: LCID) designs, manufactures, and sells luxury electric vehicles with long-range capabilities.
Why Are We Cautious About LCID?
- Negative 155% gross margin means it loses money on every sale and must pivot or scale quickly to survive
- Cash-burning history makes us doubt the long-term viability of its business model
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
Lucid’s stock price of $24.67 implies a valuation ratio of 38.3x forward price-to-sales. If you’re considering LCID for your portfolio, see our FREE research report to learn more.
Redwire (RDW)
Market Cap: $1.67 billion
Based in Jacksonville, Florida, Redwire (NYSE: RDW) is a provider of systems and components used in space infrastructure.
Why Do We Pass on RDW?
- Historically negative EPS raises concerns for risk-averse investors and makes its earnings potential harder to gauge
- 27.3 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
At $10.80 per share, Redwire trades at 12.2x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including RDW in your portfolio.
One Industrials Stock to Watch:
KBR (KBR)
Market Cap: $6.11 billion
Known for projects like the construction of Guantanamo Bay, KBR provides professional services and technologies, specializing in engineering, construction, and government services sectors.
Why Does KBR Stand Out?
- 9.9% annual revenue growth over the last two years surpassed the sector average as its offerings resonated with customers
- Operating margin expanded by 6.3 percentage points over the last five years as it scaled and became more efficient
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 16.6% exceeded its revenue gains over the last five years
KBR is trading at $47.42 per share, or 12.4x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
