Whether you see them or not, industrials businesses play a crucial part in our daily activities. 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 12.2% return over the past six months has topped the S&P 500 by 9 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 steering clear of.
Two Industrials Stocks to Sell:
Ford (F)
Market Cap: $50.98 billion
Established to make automobiles accessible to a broader segment of the population, Ford (NYSE: F) designs, manufactures, and sells a variety of automobiles, trucks, and electric vehicles.
Why Is F Risky?
- Annual sales growth of 3.1% over the last two years lagged behind its industrials peers as its large revenue base made it difficult to generate incremental demand
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $12.69 per share, Ford trades at 8x forward P/E. If you’re considering F for your portfolio, see our FREE research report to learn more.
Mobileye (MBLY)
Market Cap: $6.41 billion
With its EyeQ chips installed in over 200 million vehicles worldwide, Mobileye (NASDAQ: MBLY) develops advanced driver assistance systems and autonomous driving technologies that help vehicles detect and respond to road conditions.
Why Are We Out on MBLY?
- Sales tumbled by 4.6% annually over the last two years, showing market trends are working against its favor during this cycle
- 5.2 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Mobileye is trading at $7.65 per share, or 28.9x forward P/E. To fully understand why you should be careful with MBLY, check out our full research report (it’s free).
One Industrials Stock to Watch:
Corning (GLW)
Market Cap: $148.5 billion
Supplying windows for some of the United States’s earliest spacecraft, Corning (NYSE: GLW) provides glass and other electronic components for the consumer electronics, telecommunications, automotive, and healthcare industries.
Why Is GLW on Our Radar?
- 9.9% annual revenue growth over the last two years surpassed the sector average as its offerings resonated with customers
- Market share is on track to rise over the next 12 months as its 15.9% projected revenue growth implies demand will accelerate from its two-year trend
- Earnings per share have massively outperformed its peers over the last two years, increasing by 22% annually
Corning’s stock price of $172.65 implies a valuation ratio of 55.9x forward P/E. Is now the time to initiate a position? See for yourself 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 taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
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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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
