Industrials businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. But their prominence also brings high exposure to the ups and downs of economic cycles. Luckily, the tide is turning in their favor as the industry’s 18.8% return over the past six months has topped the S&P 500 by 8.8 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. With that said, here is one industrials stock poised to generate sustainable market-beating returns and two best left ignored.
Market Cap: $610.1 million
Acquiring Goodyear’s farm tire business in 2005, Titan (NSYE:TWI) is a manufacturer and supplier of wheels, tires, and undercarriages used in off-highway vehicles such as construction vehicles.
Why Do We Avoid TWI?
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Products and services are facing significant end-market challenges during this cycle as sales have declined by 3.7% annually over the last two years
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Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 73.4% annually, worse than its revenue
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Diminishing returns on capital suggest its earlier profit pools are drying up
Titan International’s stock price of $9.64 implies a valuation ratio of 77.9x forward P/E. To fully understand why you should be careful with TWI, check out our full research report (it’s free).
Market Cap: $665 million
Emerging from Vishay Intertechnology in 2010, Vishay Precision (NYSE:VPG) operates as a global provider of precision measurement and sensing technologies.
Why Should You Sell VPG?
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Annual sales declines of 9% for the past two years show its products and services struggled to connect with the market during this cycle
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Earnings per share fell by 15.3% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
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Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Vishay Precision is trading at $50.10 per share, or 53.2x forward P/E. Dive into our free research report to see why there are better opportunities than VPG.
Market Cap: $10.92 billion
Developing submarine detection systems for the U.S. Navy, Leonardo DRS (NASDAQ:DRS) is a provider of defense systems, electronics, and military support services.
Why Do We Watch DRS?
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Annual revenue growth of 14.5% over the past two years was outstanding, reflecting market share gains this cycle
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Backlog has averaged 44.8% growth over the past two years, showing it has a pipeline of unfulfilled orders that will support revenue in the future
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Earnings growth has trumped its peers over the last two years as its EPS has compounded at 19.5% annually
At $41.10 per share, Leonardo DRS trades at 34.9x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.