Whether you see them or not, industrials businesses play a crucial part in our daily activities. They are also bound to benefit from a friendlier regulatory environment with the Trump administration, and this excitement has led to a six-month gain of 18.2% for the sector - higher than the S&P 500’s 10.3% return.

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. On that note, here are three industrials stocks we’re swiping left on.

Terex (TEX)

Market Cap: $3.40 billion

With humble beginnings as a dump truck company, Terex (NYSE: TEX) today manufactures lifting and material handling equipment designed to move and hoist heavy goods and materials.

Why Does TEX Worry Us?

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. Incremental sales over the last two years were much less profitable as its earnings per share fell by 16.3% annually while its revenue grew
3. Free cash flow margin shrank by 5.4 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

Terex’s stock price of $51.77 implies a valuation ratio of 10.3x forward P/E. Dive into our free research report to see why there are better opportunities than TEX.

Nordson (NDSN)

Market Cap: $12.72 billion

Founded in 1954, Nordson Corporation (NASDAQ: NDSN) manufactures dispensing equipment and industrial adhesives, sealants and coatings.

Why Does NDSN Fall Short?

1. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
2. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 1.2% annually
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

At $226.13 per share, Nordson trades at 20.9x forward P/E. Check out our free in-depth research report to learn more about why NDSN doesn’t pass our bar.

Enphase (ENPH)

Market Cap: $4.96 billion

The first company to successfully commercialize the solar micro-inverter, Enphase (NASDAQ: ENPH) manufactures software-driven home energy products.

Why Are We Cautious About ENPH?

1. Declining unit sales over the past two years imply it may need to invest in improvements to get back on track
2. Efficiency has decreased over the last five years as its operating margin fell by 12 percentage points
3. Earnings per share have dipped by 27.3% annually over the past two years, which is concerning because stock prices follow EPS over the long term

Enphase is trading at $37.96 per share, or 15.2x forward P/E. Read our free research report to see why you should think twice about including ENPH in your portfolio.

Stocks We Like More

Trump’s April 2025 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 5 Growth Stocks for this month. 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 Kadant (+351% 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

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.