Whether you see them or not, industrials businesses play a crucial part in our daily activities. But their prominence also brings high exposure to the ups and downs of economic cycles. Luckily, the tide is turning in their favor as the industry’s 19.1% return over the past six months has topped the S&P 500 by 9.1 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. With that said, here are three industrials stocks that may face trouble.
Hub Group (HUBG)
Market Cap: $2.67 billion
Started with $10,000, Hub Group (NASDAQ: HUBG) is a provider of intermodal, truck brokerage, and logistics services, facilitating transportation solutions for businesses worldwide.
Why Is HUBG Risky?
- Annual sales declines of 9% for the past two years show its products and services struggled to connect with the market during this cycle
- Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 28% annually, worse than its revenue
- Diminishing returns on capital suggest its earlier profit pools are drying up
Hub Group is trading at $43.48 per share, or 22.6x forward P/E. Dive into our free research report to see why there are better opportunities than HUBG.
Hertz (HTZ)
Market Cap: $1.61 billion
Started with a dozen Model T Fords, Hertz (NASDAQ: HTZ) is a global car rental company providing vehicle rental services to leisure and business travelers.
Why Do We Think HTZ Will Underperform?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 3.8% annually over the last two years
- Eroding returns on capital suggest its historical profit centers are aging
Hertz’s stock price of $5.12 implies a valuation ratio of 0.2x forward price-to-sales. If you’re considering HTZ for your portfolio, see our FREE research report to learn more.
BrightView (BV)
Market Cap: $1.14 billion
An official field consultant for Major League Baseball, BrightView (NYSE: BV) offers landscaping design, development, and maintenance.
Why Do We Pass on BV?
- Annual sales declines of 1.4% for the past two years show its products and services struggled to connect with the market during this cycle
- Earnings per share have dipped by 11.1% annually over the past five years, which is concerning because stock prices follow EPS over the long term
- ROIC of 2.9% reflects management’s challenges in identifying attractive investment opportunities
At $12.24 per share, BrightView trades at 17.4x forward P/E. Read our free research report to see why you should think twice about including BV in your portfolio.
Stocks We Like More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
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 Kadant (+351% five-year return). Find your next big winner with StockStory today.
