Hitting a new 52-week low can be a pivotal moment for any stock. These floors often mark either the beginning of a turnaround story or confirmation that a company faces serious headwinds.
Price charts only tell part of the story. Our team at StockStory evaluates each company's underlying fundamentals to separate temporary setbacks from structural declines. Keeping that in mind, here are three stocks where the skepticism is well-placed and some better opportunities to consider.
Conagra (CAG)
One-Month Return: -4.2%
Founded in 1919 as Nebraska Consolidated Mills in Omaha, Nebraska, Conagra Brands today (NYSE:CAG) boasts a diverse portfolio of packaged foods brands that includes everything from whipped cream to jarred pickles to frozen meals.
Why Do We Steer Clear of CAG?
- Shrinking unit sales over the past two years imply it may need to invest in product improvements to get back on track
- Estimated sales decline of 1.5% for the next 12 months implies a challenging demand environment
- Efficiency has decreased over the last year as its operating margin fell by 7.9 percentage points
Conagra is trading at $22.38 per share, or 9.1x forward P/E. Check out our free in-depth research report to learn more about why CAG doesn’t pass our bar.
Mohawk Industries (MHK)
One-Month Return: -0.5%
Established in 1878, Mohawk Industries (NYSE:MHK) is a leading producer of floor-covering products for both residential and commercial applications.
Why Do We Think MHK Will Underperform?
- 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
- ROIC of 3.5% reflects management’s challenges in identifying attractive investment opportunities, and its shrinking returns suggest its past profit sources are losing steam
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
At $100.79 per share, Mohawk Industries trades at 9.9x forward P/E. Dive into our free research report to see why there are better opportunities than MHK.
Thermo Fisher (TMO)
One-Month Return: -0.5%
With over 14,000 sales personnel and a portfolio spanning more than 2,500 technology manufacturers, Thermo Fisher Scientific (NYSE:TMO) provides scientific equipment, reagents, consumables, software, and laboratory services to pharmaceutical, biotech, academic, and healthcare customers worldwide.
Why Are We Wary of TMO?
- 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
- Costs have risen faster than its revenue over the last five years, causing its adjusted operating margin to decline by 10 percentage points
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Thermo Fisher’s stock price of $405 implies a valuation ratio of 16.8x forward P/E. To fully understand why you should be careful with TMO, check out our full research report (it’s free).
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 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.