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. Keeping that in mind, here are three stocks where the outlook is warranted and some alternatives with better fundamentals.
Crocs (CROX)
One-Month Return: -15.8%
Founded in 2002, Crocs (NASDAQ:CROX) sells casual footwear and is known for its iconic clog shoe.
Why Are We Wary of CROX?
- Constant currency revenue growth has disappointed over the past two years and shows demand was soft
- Sales are projected to tank by 4% over the next 12 months as demand evaporates
- Waning returns on capital imply its previous profit engines are losing steam
At $83.92 per share, Crocs trades at 6.6x forward P/E. Check out our free in-depth research report to learn more about why CROX doesn’t pass our bar.
Select Medical (SEM)
One-Month Return: -13.7%
With a nationwide network spanning 46 states and over 2,700 healthcare facilities, Select Medical (NYSE:SEM) operates critical illness recovery hospitals, rehabilitation hospitals, outpatient rehabilitation clinics, and occupational health centers across the United States.
Why Do We Think SEM Will Underperform?
- Declining admissions over the past two years suggest it might have to lower prices to accelerate growth
- Forecasted revenue decline of 4.5% for the upcoming 12 months implies demand will fall even further
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 3.4% annually while its revenue grew
Select Medical’s stock price of $12.60 implies a valuation ratio of 10.8x forward P/E. To fully understand why you should be careful with SEM, check out our full research report (it’s free).
Alight (ALIT)
One-Month Return: -33.3%
Born from a corporate spinoff in 2017 to focus on employee experience technology, Alight (NYSE:ALIT) provides human capital management solutions that help companies administer employee benefits, payroll, and workforce management systems.
Why Should You Dump ALIT?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 2.5% annually over the last five years
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Alight is trading at $3.67 per share, or 5.8x forward P/E. If you’re considering ALIT for your portfolio, see our FREE research report to learn more.
Stocks We Like More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 6 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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