Whether you see them or not, industrials businesses play a crucial part in our daily activities. Still, their generally high capital requirements expose them to the ups and downs of economic cycles, and the industry’s six-month return of 2.7% has fallen short of the S&P 500’s 13.9% rise.
Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. Keeping that in mind, here is one industrials stock poised to generate sustainable market-beating returns and two we’re passing on.
Two Industrials Stocks to Sell:
Applied Industrial (AIT)
Market Cap: $13.28 billion
Formerly called The Ohio Ball Bearing Company, Applied Industrial (NYSE: AIT) distributes industrial products–everything from power tools to industrial valves–and services to a wide variety of industries.
Why Are We Wary of AIT?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Anticipated sales growth of 5.8% for the next year implies demand will be shaky
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 5.6% annually
Applied Industrial’s stock price of $351.10 implies a valuation ratio of 29.7x forward P/E. If you’re considering AIT for your portfolio, see our FREE research report to learn more.
ChargePoint (CHPT)
Market Cap: $160 million
The most prominent EV charging company during the COVID bull market, ChargePoint (NYSE: CHPT) is a provider of electric vehicle charging technology solutions in North America and Europe.
Why Are We Hesitant About CHPT?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 7.3% annually over the last two years
- Negative free cash flow raises questions about the return timeline for its investments
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
At $6.15 per share, ChargePoint trades at 0.3x forward price-to-sales. Check out our free in-depth research report to learn more about why CHPT doesn’t pass our bar.
One Industrials Stock to Watch:
Boeing (BA)
Market Cap: $183.1 billion
One of the companies that forms a duopoly in the commercial aircraft market, Boeing (NYSE: BA) develops, manufactures, and services commercial airplanes, defense products, and space systems.
Why Is BA Interesting?
- Products are reaching more customers as its unit sales averaged 60.4% growth over the past two years
- Estimated revenue growth of 12.3% for the next 12 months implies its momentum over the last two years will continue
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 48.1% over the last two years outstripped its revenue performance
Boeing is trading at $231.72 per share, or 190x 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
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is 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% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
