A number of stocks fell in the afternoon session after concerns about the health of the U.S. economy grew following a significant downward revision of job market data.
Industrials businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. But their prominence also brings high exposure to the ups and downs of economic cycles.
Luckily, the tide is turning in their favor as the industry’s 23.9% return over the past six months has topped the S&P 500 by 8.1 percentage points.
The Russell 2000 (^RUT) is home to many small-cap stocks, offering investors the chance to uncover hidden gems before the broader market catches on.
However, these companies often come with higher volatility and risk, as their smaller size makes them more vulnerable to economic downturns.
A highly volatile stock can deliver big gains - or just as easily wipe out a portfolio if things go south.
While some investors embrace risk, mistakes can be costly for those who aren’t prepared.
The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how CSW (NASDAQ:CSW) and the rest of the hvac and water systems stocks fared in Q2.
Small-cap stocks can be incredibly lucrative investments because their lack of analyst coverage leads to frequent mispricings.
However, these businesses (and their stock prices) often stay small because their subscale operations make it harder to expand their competitive moats.
CSW Industrials excels in quality investing with high ROIC, strong EBIT growth, zero debt, and superior profit margins, making it a standout long-term growth pick.
