Rock-bottom prices don't always mean rock-bottom businesses. The stocks we're examining today have all touched their 52-week lows, creating a classic investor's dilemma: bargain opportunity or value trap?
While market timing can be an extremely profitable strategy, it has burned many investors and requires rigorous analysis - something we specialize in at StockStory. That said, here are three stocks where the outlook is warranted and some alternatives with better fundamentals.
Carter's (CRI)
One-Month Return: -19.5%
Rumored to sell more than 10 products for every child born in the United States, Carter's (NYSE:CRI) is an American designer and marketer of children's apparel.
Why Do We Pass on CRI?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and in-store experience
- Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
- Diminishing returns on capital suggest its earlier profit pools are drying up
Carter's is trading at $33.05 per share, or 9.3x forward price-to-earnings. Read our free research report to see why you should think twice about including CRI in your portfolio.
Apogee (APOG)
One-Month Return: -16.5%
Involved in the design of the Apple Store on Fifth Avenue in New York City, Apogee (NASDAQ:APOG) sells architectural products and services such as high-performance glass for commercial buildings.
Why Do We Think Twice About APOG?
- Sales were flat over the last five years, indicating it’s failed to expand this cycle
- Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
- 2.8 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
At $39 per share, Apogee trades at 9.3x forward price-to-earnings. Check out our free in-depth research report to learn more about why APOG doesn’t pass our bar.
Masco (MAS)
One-Month Return: -13.2%
Headquartered just outside of Detroit, MI, Masco (NYSE:MAS) designs and manufactures home-building products such as glass shower doors, decorative lighting, bathtubs, and faucets.
Why Should You Sell MAS?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Earnings per share fell by 3.1% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- Diminishing returns on capital suggest its earlier profit pools are drying up
Masco’s stock price of $60.61 implies a valuation ratio of 13.9x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than MAS.
Stocks We Like More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.