One industrials stock has managed to buck the downtrend in the sector.
Fastenal, buoyed by sales of safety products during the pandemic, has rallied nearly 30% as the XLI industrial sector ETF has fallen 11%. For the second quarter, the company posted a 116% increase in safety goods such as masks and gloves.
However, Strategic Wealth Partners president Mark Tepper is skeptical Fastenal's run can last.
"It was a great quarter for these guys, but in my opinion, I just think it's unsustainable," Tepper told CNBC's "Trading Nation" on Tuesday. "They saw huge growth by selling more safety products and, fortunately for them, that offset declines in pretty much all of the rest of their businesses."
Fastenal's non-safety products include batteries, tools, plumbing and office supplies.
Tepper calls the increase in safety sales a "quarter-to-quarter phenomenon" that may fade.
"Strength in 20% of your company can't help to offset weakness in the other 80% for an extended period of time, so I wouldn't be mistaking this for an industrial rebound. This is more of a health-care play," said Tepper.
Instead, Tepper says a better way to play any rebound in the industrials is Honeywell. He sees any stock underperformance tied to weakness in its aerospace segment as a good entry point.
"It's a multi-industry industrial, it's got diversified end markets, best balance sheet in the sector, but it's got some issues and issues provide us with good entry points," said Tepper. "They can weather the storm. … We view that as a good buying opportunity."
Its aerospace segment generates more than a third of total revenue. Sales in that segment fell 27% in the second quarter, weighed on by depressed commercial flight demand. Shares have declined 17% this year.
Todd Gordon, managing director of Ascent Wealth Partners, is more bullish on Fastenal's long-term prospects.
Shares may be "overcooked in the near term but a longer-term chart shows that we have more upside to come," Gordon said during the same "Trading Nation" segment. "It's the best-in-breed industrial distributor, they've been raising the dividend, great long-term value so I wouldn't give up yet."
A long-term parallel trend channel stretching to the beginning of 1993 pushes Fastenal stock as high as $119 in the next few years, according to Gordon's chart. It closed Tuesday at $47.53.
Disclosure: Strategic Wealth Partners holds Honeywell.