1 Industrials Stock to Own for Decades and 2 That Underwhelm

Barchart·06/12/2026 03:36:18

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 16.4% for the sector - higher than the S&P 500’s 6.4% return.

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. Keeping that in mind, here is one resilient industrials stock at the top of our wish list and two we’re steering clear of.

Two Industrials Stocks to Sell:

Insteel (IIIN)

Market Cap: $561.6 million

Growing from a small wire manufacturer to one of the largest in the U.S., Insteel (NYSE:IIIN) provides steel wire reinforcing products for concrete.

Why Are We Cautious About IIIN?

1. Annual revenue growth of 5.9% over the last five years was below our standards for the industrials sector
2. Free cash flow margin shrank by 5 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
3. Diminishing returns on capital suggest its earlier profit pools are drying up

At $28.87 per share, Insteel trades at 16x forward P/E. If you’re considering IIIN for your portfolio, see our FREE research report to learn more.

Enphase (ENPH)

Market Cap: $7.24 billion

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

Why Are We Out on ENPH?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 12.5% annually over the last two years
2. 10.9 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
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

Enphase is trading at $56.23 per share, or 25x forward P/E. Dive into our free research report to see why there are better opportunities than ENPH.

One Industrials Stock to Buy:

Construction Partners (ROAD)

Market Cap: $5.98 billion

Founded in 2001, Construction Partners (NASDAQ:ROAD) is a civil infrastructure company that builds and maintains roads, highways, and other infrastructure projects.

Why Are We Bullish on ROAD?

1. Annual revenue growth of 39.9% over the last two years was superb and indicates its market share increased during this cycle
2. Incremental sales over the last two years have been highly profitable as its earnings per share increased by 46.7% annually, topping its revenue gains
3. Free cash flow margin grew by 7.4 percentage points over the last five years, giving the company more chips to play with

Construction Partners’s stock price of $105.66 implies a valuation ratio of 32.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.

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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.

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