Even if they go mostly unnoticed, industrial businesses are the backbone of our country. They are also bound to benefit from a friendlier regulatory environment with the Trump administration, and this excitement has led to a six-month gain of 10.2% for the sector. Investing here would have been wise - at the same time, the S&P 500 shed 1.8% of its value.
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 resilient industrials stock at the top of our wish list and two that may face trouble.
Two Industrials Stocks to Sell:
Heartland Express (HTLD)
Market Cap: $867.6 million
Founded by the son of a trucker, Heartland Express (NASDAQ: HTLD) offers full-truckload deliveries across the United States and Mexico.
Why Do We Steer Clear of HTLD?
- Annual sales declines of 18.3% for the past two years show its products and services struggled to connect with the market during this cycle
- Free cash flow margin dropped by 12.1 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Heartland Express is trading at $11.12 per share, or 7.8x forward EV-to-EBITDA. If you’re considering HTLD for your portfolio, see our FREE research report to learn more.
Orion (ORN)
Market Cap: $458.1 million
Established in 1994, Orion (NYSE: ORN) provides construction services for marine infrastructure and industrial projects.
Why Are We Wary of ORN?
- Sales trends were unexciting over the last five years as its 3.7% annual growth was below the typical industrials company
- Issuance of new shares over the last five years caused its earnings per share to fall by 11.9% annually while its revenue grew
- Low free cash flow margin of -0.7% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
At $11.63 per share, Orion trades at 28.5x forward P/E. Dive into our free research report to see why there are better opportunities than ORN.
One Industrials Stock to Buy:
Limbach (LMB)
Market Cap: $980.7 million
Established in 1901, Limbach (NASDAQ: LMB) provides integrated building systems solutions, including mechanical, electrical, and plumbing services.
Why Is LMB a Top Pick?
- Annual revenue growth of 11.9% over the past two years was outstanding, reflecting market share gains this cycle
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 46.5% annually, topping its revenue gains
- Free cash flow margin grew by 11.6 percentage points over the last five years, giving the company more chips to play with
Limbach’s stock price of $84.07 implies a valuation ratio of 17.7x 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
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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.
