1 Industrials Stock with Promising Prospects and 2 to Brush Off
Industrials businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. Unfortunately, this role also comes with a demand profile tethered to the ebbs and flows of the broader economy, and investors seem to be forecasting a downturn - over the past six months, the industry has pulled back by 10.4%. This drawdown was worse than the S&P 500's 1.9% decline.
Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. Keeping that in mind, here is one industrials stock poised to generate sustainable market-beating returns and two we're steering clear of.
Market Cap: $5.07 billion
Originally focusing on mobile offices for construction sites, WillScot (NASDAQ:WSC) provides ready-to-use temporary spaces, largely for longer-term lease.
Why Does WSC Fall Short?
2.4% annual revenue growth over the last two years was slower than its industrials peers
Incremental sales over the last two years were much less profitable as its earnings per share fell by 3.4% annually while its revenue grew
Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 5 percentage points
WillScot Mobile Mini is trading at $27.90 per share, or 16.8x forward P/E. Read our free research report to see why you should think twice about including WSC in your portfolio, it's free.
Market Cap: $14.61 billion
Founded in 1990 when a group of engineers from five companies decided to merge, AECOM (NYSE:ACM) provides various infrastructure consulting services.
Why Does ACM Worry Us?
Product roadmap and go-to-market strategy need to be reconsidered as its backlog has averaged 1.6% declines over the past two years
Gross margin of 6.4% reflects its high production costs
Operating margin of 4.3% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
AECOM's stock price of $110.69 implies a valuation ratio of 21.6x forward P/E. If you're considering ACM for your portfolio, see our FREE research report to learn more.
Market Cap: $6.49 billion
Credited with an invention in the 1950s that improved crop yields, Valmont (NYSE:VMI) provides engineered products and infrastructure services for the agricultural industry.
Why Could VMI Be a Winner?
Operating margin expanded by 4.9 percentage points over the last five years as it scaled and became more efficient
Earnings per share grew by 18.7% annually over the last two years and trumped its peers
Free cash flow margin increased by 7.9 percentage points over the last five years, giving the company more capital to invest or return to shareholders
At $323.42 per share, Valmont trades at 17.5x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it's free.
Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. 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.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Newsweek
14 minutes ago
- Newsweek
Trump Says Musk Wants to Talk After Explosive Public Feud
President Donald Trump said Elon Musk is "the man who has lost his mind," brushing off their high-profile fallout despite headlines suggesting the two may soon speak, per ABC News Chief Washington Correspondent Jonathan Karl . "Not particularly," Trump said about whether he was interested in a call, claiming Musk was keen to speak. 08:28 AM EDT Russia offers political asylum to Elon Musk over Trump feud Elon Musk looks on during a news conference with US President Donald Trump in the Oval Office of the White House in Washington, DC, on May 30, 2025. Elon Musk looks on during a news conference with US President Donald Trump in the Oval Office of the White House in Washington, DC, on May 30, 2025. ALLISON ROBBERT/AFP via Getty Images A Russian official said the American billionaire Elon Musk could be offered political asylum in Russia over his fierce dispute with U.S. President Donald Trump. Dmitry Novikov, first deputy chairman of the State Duma Committee on International Affairs, commented to Russian state news outlet TASS. "I think that Musk has a completely different game, [so] he will not need any political asylum, although if he did, Russia, of course, could provide it," Novikov said, in remarks translated from Russian. Musk and Trump, ostensibly political allies over cuts to federal spending, publicly clashed on June 5 in a series of social media exchanges and comments to reporters. The dispute's origin is the impact of Trump's One Big Beautiful Bill on U.S. public debt. Read the full story by Jordan King and Shane Croucher on Newsweek.
Yahoo
14 minutes ago
- Yahoo
Trump's 'big, beautiful' budget bill could cost Canadians billions
A small, obscure section buried in U.S. President Donald Trump's One Big Beautiful Bill Act could cost Canadians and Canadian companies billions of dollars, CBC News has learned. Moreover, it could hand Prime Minister Mark Carney's government yet another political hot potato from south of the border — forcing it to choose between scrapping Canada's digital services tax (DST) or risk the U.S. imposing a new withholding tax on the income Canadians, Canadian companies and pension plans receive from investments in U.S. securities. While it still has steps to go before becoming law, the provision has Canadian experts worried. "This is building a nuclear option into a tax treaty that has lasted for 80 years between Canada and the U.S," said David Macdonald, senior economist with the Canadian Centre for Policy Alternatives. "Just like the U.S. is totally willing to blow up the international trade order, they're totally willing to blow up international tax rules." The concern centres on Section 899 of Trump's One Big Beautiful Bill — more than 1,000 pages of proposed legislation that Trump says will make good on his domestic campaign promises, including tax cuts for Americans. The bill passed the House of Representatives on May 22 by one vote and now has to be approved by the Senate. Section 899, entitled Enforcement of Remedies Against Unfair Foreign Taxes, would increase withholding taxes for non-resident individuals and companies from countries that the U.S. believes have imposed discriminatory or unfair taxes. Experts believe Canada is likely to be one of the countries targeted by the measure because of U.S. government criticism of the DST. The tax applies to all large businesses, foreign and domestic, that earn revenues from certain online business models in Canada. Global minimum tax measures adopted by Canada could also put it in the Trump administration's crosshairs. The timeline for the legislation is in flux and Section 899 could still get dropped from the bill or be amended. If, however, Section 899 becomes law, it could hit Canadians in different ways. For example, the U.S. currently imposes a 15 per cent withholding tax on dividends Canadians receive from U.S. companies. Under tax treaties, however, an equivalent tax credit from the Canadian government generally offsets the withholding tax. If the measure becomes law and the Trump administration designates Canada as a country with discriminatory taxes, a new five per cent withholding tax would go into effect. That tax would increase by five percentage points per year to a maximum of 20 per cent. It is not known if Canada would adjust its tax credits to offset such a tax. Max Reed, a cross-border tax lawyer with Polaris Tax Counsel, said the potential impact could be wide ranging. "It's definitely going to be in the billions, maybe tens of billions," he said. Kim Moody, founder of Moodys Private Client and Moodys Tax, agrees. "Billions, absolutely billions, for sure, would be the impact," he said. "If Canada and the United States allows this to take hold, the result will be chaos. Absolute chaos." Experts say it is not clear exactly how the tax would be applied. For example, would the new withholding tax be imposed on top of existing withholding taxes? Would it also apply to securities held within registered accounts such as RRSPs or only to dividends from shares held directly by Canadians?Finance Minister François-Philippe Champagne's office declined an interview request from CBC News. "Analysis of the implications of the U.S. tax reform bill is ongoing and we await the final version of the bill," wrote spokeswoman Audrey Milette. The U.S. embassy also declined to comment on Section 899 or how it would work. "We are unable to comment at this time as the legislation is still pending final approval," responded an embassy official. U.S. Internal Revenue Service figures show that in 2022, the U.S. withheld $2.9 billion US in tax on $108.5 billion US worth of income from a variety of U.S. sources for Canadian residents and companies. The IRS said $261.4 million US was withheld from individual Canadian residents while $1.22 billion was withheld from companies and $1.24 billion US under the category of Canadian "withholding rate pools (general)." Of the sources of U.S. income received by Canadians, the IRS said $31 billion US was from dividends — half of which went to Canadian corporations. David Pierce, vice-president of government relations for the Canadian Chamber of Commerce, said the chamber began getting worried messages from Canadian businesses once Trump's tax reform bill passed the House of Representatives. "I think the attention and the awareness of it really grew from what was a small subset of companies, now right across the economy — from financial to pensions to, you name it," Pierce said. "They're all very concerned at what this means for average Canadians in your retirement savings and how this would be applied should, of course, it become law." Pierce said the potential cost of Section 899 far outweighs revenue the Canadian government collects from the DST, a tax his group has opposed from the outset. He said the Canadian government should pause the next DST payment scheduled for June 30 and consider getting rid of the tax in negotiations with the U.S. "The concern is that when the U.S. administration makes allegations of Canada's trade practices, they can cite the DST and that's a talking point that rings true not just for Republicans, but also Democrats, in the United States," said Pierce. "That strengthens their hand. It's not strengthening our hand at the bargaining table." Macdonald says the proposed withholding tax would hit hard. "It would have major impacts on Canadian companies, Canadian investors in the U.S — they'd be downright punitive," said Macdonald. "That would probably end up shutting down Canadian businesses in the U.S. and kicking Canadian investors out of the U.S." And the DST isn't the only Canadian tax the U.S. could consider unfair now, or in the future, said Macdonald. "I think this is the tip of the iceberg in terms of threats against Canadian corporate taxation that attempts to level the playing field between American transnationals and Canadian domestic companies that are paying corporate income taxes," he said. Macdonald said the proposed tax could also hit Canadians who don't have direct investments in U.S. securities. "This isn't only for folks with an RRSP," Macdonald said. "I mean, this could extend to the Canada Pension Plan, which is the major means by which people retire in Canada. They could potentially pay dramatically more." The Canada Pension Plan Investment Board declined to comment.
Yahoo
19 minutes ago
- Yahoo
Microsoft Climbs Record High, Reclaims Market Cap Crown Amid Tech Selloff
June 6 - Microsoft (NASDAQ:MSFT) stock notched a fresh all-time closing high on Thursday, bucking a broader decline across the tech sector. The shares edged up about 1% to end the session at $467.68, the company's first record close since July 2024. The gain pushed Microsoft back to the top of the global market capitalization rankings, now valued at $3.48 trillion. Nvidia (NASDAQ:NVDA) trails at $3.42 trillion, while Apple (NASDAQ:AAPL) sits at $3 trillion. Warning! GuruFocus has detected 5 Warning Sign with MSFT. Despite a volatile session driven by a sharp drop in Tesla (NASDAQ:TSLA), Microsoft held steady. The market's attention was diverted by a public spat between Tesla CEO Elon Musk and former President Donald Trump, involving a controversial spending bill and Musk's exit from a Trump-aligned government office. Meanwhile, Microsoft CEO Satya Nadella reinforced the company's ongoing collaboration with artificial intelligence partner OpenAI in comments published Thursday. He highlighted a recent expansion of OpenAI's commitment to Microsoft's Azure cloud service. The tech giant has poured nearly $14 billion into the AI startup to date. Microsoft shares are now up 11% for the year, outperforming the Nasdaq Composite, which remains roughly flat. Based on the one year price targets offered by 49 analysts, the average target price for Microsoft Corp is $506.27 with a high estimate of $650.00 and a low estimate of $423.00. The average target implies a upside of +8.25% from the current price of $467.68. Based on GuruFocus estimates, the estimated GF Value for Microsoft Corp in one year is $505.29, suggesting a upside of +8.04% from the current price of $467.68 This article first appeared on GuruFocus. Sign in to access your portfolio
