Whether you see them or not, industrials businesses play a crucial part in our daily activities. Unfortunately, this role also comes with a demand profile tethered to the ebbs and flows of the broader economy, and the industry is currently lagging as its six-month return of 6.9% has trailed the S&P 500’s 21.1% gain.
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. With that said, 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:
Perma-Fix (PESI)
Market Cap: $327 million
Tackling hazardous waste challenges since 1990, Perma-Fix (NASDAQ: PESI) provides environmental waste treatment services.
Why Should You Sell PESI?
- Sales tumbled by 10.2% annually over the last five years, showing market trends are working against it during this cycle
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
Perma-Fix is trading at $15.43 per share, or 4.1x forward price-to-sales. To fully understand why you should be careful with PESI, check out our full research report (it’s free).
Landstar (LSTR)
Market Cap: $5.72 billion
Covering billions of miles throughout North America, Landstar (NASDAQ: LSTR) is a transportation company specializing in freight and last-mile delivery services.
Why Do We Pass on LSTR?
- Sales stagnated over the last five years and signal the need for new growth strategies
- Performance over the past five years shows each sale was less profitable, as its earnings per share fell by 10.7% annually
- Diminishing returns on capital suggest its earlier profit pools are drying up
Landstar’s stock price of $168.60 implies a valuation ratio of 24x forward P/E. If you’re considering LSTR for your portfolio, see our FREE research report to learn more.
One Industrials Stock to Buy:
AAR (AIR)
Market Cap: $4.24 billion
The first third-party MRO approved by the FAA for Safety Management System Requirements, AAR (NYSE: AIR) is a provider of aircraft maintenance services
Why Will AIR Outperform?
- Annual revenue growth of 19.9% over the last two years was superb and indicates its market share increased during this cycle
- Additional sales over the last two years increased its profitability as the 26.8% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin grew by 1.4 percentage points over the last five years, giving the company more chips to play with
At $107.82 per share, AAR trades at 19.6x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating 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.
