Whether you see them or not, industrials businesses play a crucial part in our daily activities. But this role also comes with a demand profile tethered to the ebbs and flows of the broader economy. Thankfully, industrial end markets were stable over the past six months as the industry’s 7.2% gain has nearly mirrored the S&P 500.

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. Taking that into account, here are three industrials stocks best left ignored.

Leidos (LDOS)

Market Cap: $20.88 billion

Formed through the split of IT services company SAIC, Leidos (NYSE:LDOS) offers technology and engineering solutions such as military training systems for the defense, civil, and health markets.

Why Are We Wary of LDOS?

Estimated sales growth of 2.6% for the next 12 months implies demand will slow from its two-year trend

Leidos’s stock price of $162.25 implies a valuation ratio of 14.8x forward P/E. To fully understand why you should be careful with LDOS, check out our full research report (it’s free).

United Parcel Service (UPS)

Market Cap: $86.5 billion

Trademarking its recognizable UPS Brown color, UPS (NYSE:UPS) offers package delivery, supply chain management, and freight forwarding services.

Why Do We Pass on UPS?

Declining unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 19.8% annually, worse than its revenue Eroding returns on capital suggest its historical profit centers are aging

At $102.30 per share, United Parcel Service trades at 13.3x forward P/E. Check out our free in-depth research report to learn more about why UPS doesn’t pass our bar.

Luxfer (LXFR)

Market Cap: $333.5 million

With its magnesium alloys used in the construction of the famous Spirit of St. Louis aircraft, Luxfer (NYSE:LXFR) offers specialized materials, components, and gas containment devices to various industries.

Why Do We Steer Clear of LXFR?

Annual revenue growth of 1.6% over the last one years was below our standards for the industrials sector 8.7 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 Waning returns on capital imply its previous profit engines are losing steam

Luxfer is trading at $12.52 per share, or 11.9x forward P/E. If you’re considering LXFR for your portfolio, see our FREE research report to learn more.

Story Continues

High-Quality Stocks for All Market Conditions

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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-small-cap company Exlservice (+354% 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

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