Even if they go mostly unnoticed, industrial businesses are the backbone of our country. Their momentum is also rising as lower interest rates have incentivized higher capital spending. As a result, the industry has posted a 13.2% gain over the past six months, beating the S&P 500 by 1.7 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. Keeping that in mind, here are three industrials stocks best left ignored.
Hyster-Yale Materials Handling (HY)
Market Cap: $552.9 million
Playing a significant role in the development of the hydraulic lift truck, Hyster-Yale (NYSE:HY) designs, manufactures, and sells materials handling equipment to various sectors.
Why Are We Out on HY?
- Annual sales declines of 2% for the past two years show its products and services struggled to connect with the market during this cycle
- Forecasted revenue decline of 6.4% for the upcoming 12 months implies demand will fall even further
- Earnings per share fell by 2.6% annually over the last five years while its revenue grew, partly because it diluted shareholders
Hyster-Yale Materials Handling’s stock price of $31.08 implies a valuation ratio of 13.5x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than HY.
Ameresco (AMRC)
Market Cap: $1.54 billion
Having played a role in upgrading the energy solutions of Alcatraz Island, Ameresco (NYSE:AMRC) provides energy and renewable energy solutions for various sectors.
Why Does AMRC Fall Short?
- Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 16.5%
- Negative free cash flow raises questions about the return timeline for its investments
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
At $29.50 per share, Ameresco trades at 31.3x forward P/E. Read our free research report to see why you should think twice about including AMRC in your portfolio.
RXO (RXO)
Market Cap: $2.25 billion
With access to millions of trucks, RXO (NYSE:RXO) offers full-truckload, less-than-truckload, and last-mile deliveries.
Why Does RXO Worry Us?
- Projected sales decline of 2.4% for the next 12 months points to a tough demand environment ahead
- Efficiency has decreased over the last five years as its operating margin fell by 5 percentage points
- Earnings per share fell by 60.8% annually over the last two years while its revenue grew, showing its incremental sales were much less profitable
RXO is trading at $13.69 per share, or 800.1x forward P/E. If you’re considering RXO for your portfolio, see our FREE research report to learn more.
Stocks We Like More
Check out the high-quality names we’ve flagged in 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 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.