Industrials businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. Still, their generally high capital requirements expose them to the ups and downs of economic cycles, and the market seems to be baking in a prolonged downturn as the industry has shed 13.5% over the past six months. This drop was worse than the S&P 500’s 7.5% loss.

The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. On that note, here is one industrials stock poised to generate sustainable market-beating returns and two we’re swiping left on.

Two Industrials Stocks to Sell:

Owens Corning (OC)

Market Cap: $11.82 billion

Credited with the discovery of fiberglass, Owens Corning (NYSE:OC) supplies building and construction materials to the United States and international markets.

Why Are We Hesitant About OC?

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. Sales are projected to tank by 3.8% over the next 12 months as demand evaporates

3. Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 27.4%

At $138.17 per share, Owens Corning trades at 8.5x forward price-to-earnings. If you’re considering OC for your portfolio, see our FREE research report to learn more .

Gibraltar (ROCK)

Market Cap: $1.52 billion

Gibraltar (NASDAQ:ROCK) makes renewable energy, agriculture technology and infrastructure products. Its mission statement is to make everyday living more sustainable.

Why Does ROCK Give Us Pause?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 3% annually over the last two years

2. Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 25%

Gibraltar is trading at $51.02 per share, or 10.7x forward price-to-earnings. Read our free research report to see why you should think twice about including ROCK in your portfolio, it’s free .

One Industrials Stock to Watch:

Caterpillar (CAT)

Market Cap: $141.4 billion

With its iconic yellow machinery working on construction sites, Caterpillar (NYSE:CAT) manufactures construction equipment like bulldozers, excavators, and parts and maintenance services.

Why Could CAT Be a Winner?

1. Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage

2. Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue

3. Rising returns on capital show management is finding more attractive investment opportunities