1 Industrials Stock Worth Investigating and 2 Facing Headwinds

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 17.5% gain over the past six months, beating the S&P 500 by 6.4 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. On that note, here is one resilient industrials stock at the top of our wish list and two best left ignored.

Two Industrials Stocks to Sell:

AMETEK (AME)

Market Cap: $48.29 billion

Started from its humble beginnings in motor repair, AMETEK (NYSE:AME) manufactures electronic devices used in industries like aerospace, power, and healthcare.

Why Are We Wary of AME?

1. Sales trends were unexciting over the last two years as its 5.1% annual growth was below the typical industrials company
2. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion

AMETEK’s stock price of $209.60 implies a valuation ratio of 26.9x forward P/E. Dive into our free research report to see why there are better opportunities than AME.

Alta (ALTG)

Market Cap: $195 million

Founded in 1984, Alta Equipment Group (NYSE:ALTG) is a provider of industrial and construction equipment and services across the Midwest and Northeast United States.

Why Do We Pass on ALTG?

1. Sales trends were unexciting over the last two years as its 1.1% annual growth was below the typical industrials company
2. Cash-burning history makes us doubt the long-term viability of its business model
3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

At $6.06 per share, Alta trades at 6.2x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why ALTG doesn’t pass our bar.

One Industrials Stock to Watch:

Advanced Drainage (WMS)

Market Cap: $12.19 billion

Originally started as a farm water drainage company, Advanced Drainage Systems (NYSE:WMS) provides clean water management solutions to communities across America.

Why Does WMS Stand Out?

1. Healthy operating margin of 21.5% shows it’s a well-run company with efficient processes, and its rise over the last five years was fueled by some leverage on its fixed costs
2. Free cash flow margin increased by 11.3 percentage points over the last five years, giving the company more capital to invest or return to shareholders
3. Stellar returns on capital showcase management’s ability to surface highly profitable business ventures, and its returns are growing as it capitalizes on even better market opportunities

Advanced Drainage is trading at $156.83 per share, or 25.9x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out our Top 5 Growth Stocks for this month. 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.