3 Industrials Stocks with Open Questions

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 21.7% gain over the past six months, beating the S&P 500 by 11.7 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 are three industrials stocks we’re swiping left on.

Rush Enterprises (RUSHA)

Market Cap: $4.69 billion

Headquartered in Texas, Rush Enterprises (NASDAQ:RUSH.A) provides truck-related services and solutions, including sales, leasing, parts, and maintenance for commercial vehicles.

Why Should You Dump RUSHA?

1. Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last two years
2. Estimated sales decline of 3.6% for the next 12 months implies an even more challenging demand environment
3. Sales over the last two years were less profitable as its earnings per share fell by 12% annually while its revenue was flat

Rush Enterprises is trading at $61.53 per share, or 19.2x forward P/E. Check out our free in-depth research report to learn more about why RUSHA doesn’t pass our bar.

Valmont (VMI)

Market Cap: $8.74 billion

Credited with an invention in the 1950s that improved crop yields, Valmont (NYSE:VMI) provides engineered products and infrastructure services for the agricultural industry.

Why Are We Cautious About VMI?

1. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 2.8%
3. Gross margin of 28.3% is below its competitors, leaving less money to invest in areas like marketing and R&D

Valmont’s stock price of $443.58 implies a valuation ratio of 21.5x forward P/E. Dive into our free research report to see why there are better opportunities than VMI.

Ducommun (DCO)

Market Cap: $1.71 billion

California’s oldest company, Ducommun (NYSE:DCO) is a provider of engineering and manufacturing services for high-performance products primarily within the aerospace and defense industries.

Why Are We Wary of DCO?

1. Average backlog growth of 4.8% over the past two years was mediocre and suggests fewer customers signed long-term contracts
2. Costs have risen faster than its revenue over the last five years, causing its operating margin to decline by 12.2 percentage points
3. Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its falling returns suggest its earlier profit pools are drying up

At $114.24 per share, Ducommun trades at 27.4x forward P/E. To fully understand why you should be careful with DCO, check out our full research report (it’s free).

Stocks We Like More

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 9 Market-Beating Stocks. 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.