Even if they go mostly unnoticed, industrial businesses are the backbone of our country. Unfortunately, this role also comes with a demand profile tethered to the ebbs and flows of the broader economy. The market seems to be debating where we are in the cycle as the industrials stocks were flat over the past six months. At the same time, the S&P 500 rose by 3.7%.
The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. On that note, here is one industrials stock boasting a durable advantage and two we’re passing on.
Two IndustrialsStocks to Sell:
Sanmina (SANM)
Market Cap: $5.45 billion
Founded in 1980, Sanmina (NASDAQ: SANM) is an electronics manufacturing services company offering end-to-end solutions for various industries.
Why Do We Avoid SANM?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 6.2% annually over the last two years
- Gross margin of 8.2% is below its competitors, leaving less money to invest in areas like marketing and R&D
- Earnings per share have contracted by 4.2% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
Sanmina’s stock price of $102 implies a valuation ratio of 15.2x forward P/E. To fully understand why you should be careful with SANM, check out our full research report (it’s free).
Trimble (TRMB)
Market Cap: $19.43 billion
Playing a role in the construction of the Paris Grand, Trimble (NASDAQ: TRMB) offers geospatial devices and technology to the agriculture, construction, transportation, and logistics industries.
Why Do We Pass on TRMB?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Estimated sales decline of 2.5% for the next 12 months implies an even more challenging demand environment
- 9.6 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
Trimble is trading at $81.38 per share, or 27.2x forward P/E. Read our free research report to see why you should think twice about including TRMB in your portfolio.
One Industrials Stock to Buy:
Bloom Energy (BE)
Market Cap: $5.89 billion
Working in stealth mode for eight years, Bloom Energy (NYSE: BE) designs, manufactures, and markets solid oxide fuel cell systems for on-site power generation.
Why Do We Love BE?
- Impressive 14.5% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 68.2% outpaced its revenue gains
- Free cash flow margin is now positive, showing the company has crossed a key inflection point
At $25.40 per share, Bloom Energy trades at 56.7x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
Trump’s April 2024 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out 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 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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