Three Industrials Stocks to Avoid: Cummins, Columbus McKinnon, and Methode Electronics.

Cummins, Columbus McKinnon, and Methode Electronics are three industrials stocks that raise concerns. Cummins has a sizable revenue base but growth challenges, while Columbus McKinnon has flat sales and declining profitability. Methode Electronics faces significant end-market challenges and eroding returns on capital, with a short cash runway increasing the probability of a capital raise that dilutes existing shareholders.

In the industrial sector, three prominent stocks have raised concerns among investors. Cummins Inc. (CMI), Columbus McKinnon (CMCO), and Methode Electronics (MTH) are facing distinct challenges that warrant attention.

Cummins Inc., a leading manufacturer of diesel and natural gas engines and powertrains, has a robust revenue base but faces growth challenges. On August 15, 2025, Cummins shares fell 1.33% to $388.33, with trading volume dropping to $280 million, ranking 376th in market activity [1]. Despite a mixed analyst outlook, the company's recent quarterly earnings report exceeded expectations with $6.43 EPS and $8.64 billion in revenue, although revenue declined 1.7% year-over-year. The company's 26.96% return on equity and 8.72% net margin underscore operational strength. However, the firm's dividend increase to $2.00/share (8% yield) and insider sales like VP Luther E. Peters' 4,850-share disposal reflect mixed near-term valuation views [1].

Columbus McKinnon (CMCO) has been experiencing flat sales and declining profitability. The company's recent financial performance indicates a lack of growth, which is a significant concern for investors. While specific financial data for CMCO is not provided in the given materials, its flat sales and declining profitability suggest a need for strategic adjustments to improve its financial health.

Methode Electronics (MTH) faces significant end-market challenges and eroding returns on capital. The company's short cash runway increases the probability of a capital raise that could dilute existing shareholders. The exact details of MTH's financial performance are not provided in the given materials, but its end-market challenges and cash flow concerns are critical issues that investors should monitor closely.

In conclusion, while Cummins Inc. has a strong operational foundation, its growth challenges and mixed analyst views are areas of concern. Columbus McKinnon's flat sales and declining profitability, and Methode Electronics' end-market challenges and cash flow issues, all present significant challenges for these companies. Investors should closely monitor these stocks and consider the potential risks associated with their respective financial situations.

References:
[1] https://www.ainvest.com/news/cummins-shares-slide-1-33-trading-volume-drops-280m-ranking-376th-mixed-analyst-outlooks-cautious-institutional-accumulation-2508/
[2] https://www.marketbeat.com/instant-alerts/filing-russell-investments-group-ltd-decreases-stock-holdings-in-cummins-inc-nysecmi-2025-08-14/