Industrials businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. Their momentum is also rising as lower interest rates have incentivized higher capital spending. As a result, the industry has posted a 21% gain over the past six months, beating the S&P 500 by 12.5 percentage points.
Although these companies have produced results lately, a cautious approach is imperative. When the cycle naturally turns, the losers can be left for dead while the winners consolidate and take more of the market. On that note, here is one industrials stock poised to generate sustainable market-beating returns and two we’re swiping left on.
Two Industrials Stocks to Sell:
BrightView (BV)
Market Cap: $1.22 billion
An official field consultant for Major League Baseball, BrightView (NYSE: BV) offers landscaping design, development, and maintenance.
Why Do We Steer Clear of BV?
- Annual sales declines of 1.8% for the past two years show its products and services struggled to connect with the market during this cycle
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
- Underwhelming 2.9% return on capital reflects management’s difficulties in finding profitable growth opportunities
At $12.92 per share, BrightView trades at 16.9x forward P/E. Dive into our free research report to see why there are better opportunities than BV.
Luxfer (LXFR)
Market Cap: $404.6 million
With its magnesium alloys used in the construction of the famous Spirit of St. Louis aircraft, Luxfer (NYSE: LXFR) offers specialized materials, components, and gas containment devices to various industries.
Why Should You Sell LXFR?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.5% annually over the last two years
- Projected sales decline of 4.2% over the next 12 months indicates demand will continue deteriorating
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Luxfer is trading at $15.15 per share, or 13.7x forward P/E. Check out our free in-depth research report to learn more about why LXFR doesn’t pass our bar.
One Industrials Stock to Buy:
Armstrong World (AWI)
Market Cap: $8.36 billion
Started as a two-man shop dating back to the 1860s, Armstrong (NYSE: AWI) provides ceiling and wall products to commercial and residential spaces.
Why Are We Backing AWI?
- Market share has increased this cycle as its 11.5% annual revenue growth over the last two years was exceptional
- Disciplined cost controls and effective management resulted in a strong long-term operating margin of 24.7%, and it turbocharged its profits by achieving some fixed cost leverage
- Share buybacks catapulted its annual earnings per share growth to 18.7%, which outperformed its revenue gains over the last two years
Armstrong World’s stock price of $193.72 implies a valuation ratio of 23.3x 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
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Strong Momentum 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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.
