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 market seems confused about where we could go next. This uncertainty has led to a flat return for the industry over the past six months while the S&P 500 was up 12.7%.
Only some companies are subject to these dynamics, however, and a handful of high-quality businesses can deliver earnings growth in any environment. On that note, here is one resilient industrials stock at the top of our wish list and two we’re steering clear of.
Two Industrials Stocks to Sell:
Wabash (WNC)
Market Cap: $475.4 million
With its first trailer reportedly built on two sawhorses, Wabash (NYSE:WNC) offers semi trailers, liquid transportation containers, truck bodies, and equipment for moving goods.
Why Are We Bearish on WNC?
- Sales pipeline suggests its future revenue growth won’t meet our standards as its backlog averaged 24.9% declines over the past two years
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
At $11.67 per share, Wabash trades at 19.9x forward EV-to-EBITDA. If you’re considering WNC for your portfolio, see our FREE research report to learn more.
Enphase (ENPH)
Market Cap: $5.07 billion
The first company to successfully commercialize the solar micro-inverter, Enphase (NASDAQ:ENPH) manufactures software-driven home energy products.
Why Do We Avoid ENPH?
- Declining unit sales over the past two years suggest it might have to lower prices to accelerate growth
- Free cash flow margin shrank by 15.4 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Eroding returns on capital suggest its historical profit centers are aging
Enphase is trading at $38.50 per share, or 19.7x forward P/E. Check out our free in-depth research report to learn more about why ENPH doesn’t pass our bar.
One Industrials Stock to Buy:
FuelCell Energy (FCEL)
Market Cap: $1.47 billion
Founded in 1969, FuelCell Energy (NASDAQ: FCEL) is a leading manufacturer and developer of carbonate fuel cell technology for stationary power generation.
Why Will FCEL Outperform?
- Annual revenue growth of 38.8% over the last two years was superb and indicates its market share increased during this cycle
- Earnings per share have massively outperformed its peers over the last two years, increasing by 40.6% annually
- Cash-burning tendencies have improved over the last five years, showing it could become financially independent one day
FuelCell Energy’s stock price of $18.49 implies a valuation ratio of 5.4x forward price-to-sales. Is now a good time to buy? See for yourself in our comprehensive 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-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.