Industrials businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. But they are at the whim of volatile macroeconomic factors that influence capital spending (like interest rates), and the market seems convinced that demand will slow. Due to this bearish outlook, the industry has tumbled by 6.6% over the past six months. This drop was worse than the S&P 500’s 1% decline.

Some companies can grow regardless of the economic backdrop, but the odds aren’t great for the ones we’re analyzing today. On that note, here are three industrials stocks we’re passing on.

Cadre (CDRE)

Market Cap: $1.46 billion

Originally known as Safariland, Cadre (NYSE: CDRE) specializes in manufacturing and distributing safety and survivability equipment for first responders.

Why Do We Think Twice About CDRE?

1. Costs have risen faster than its revenue over the last five years, causing its operating margin to decline by 2 percentage points
2. Earnings per share fell by 10.7% annually over the last four years while its revenue grew, showing its incremental sales were much less profitable
3. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 2.9 percentage points

Cadre’s stock price of $36.01 implies a valuation ratio of 15.5x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why CDRE doesn’t pass our bar.

MasTec (MTZ)

Market Cap: $12.16 billion

Involved in the 1996 Olympic Games MasTec (NYSE: MTZ) is an infrastructure construction company that specializes in the telecommunications, energy, and utility industries.

Why Does MTZ Give Us Pause?

1. Gross margin of 13.2% reflects its high production costs
2. Incremental sales over the last five years were much less profitable as its earnings per share fell by 3.2% annually while its revenue grew
3. Free cash flow margin dropped by 4.4 percentage points over the last five years, implying the company became more capital intensive as competition picked up

At $156.80 per share, MasTec trades at 26.7x forward P/E. Dive into our free research report to see why there are better opportunities than MTZ.

Trimble (TRMB)

Market Cap: $17 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 Think TRMB Will Underperform?

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. Projected sales decline of 2.5% for the next 12 months points to an even tougher demand environment ahead
3. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 9.6 percentage points

Trimble is trading at $70.47 per share, or 23.8x forward P/E. Read our free research report to see why you should think twice about including TRMB in your portfolio.

High-Quality Stocks for All Market Conditions

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.

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.