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?
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. That said, here are three stocks facing legitimate challenges and some alternatives worth exploring instead.
Tyson Foods (TSN)
One-Month Return: +0.1%
Started as a simple trucking business, Tyson Foods (NYSE: TSN) is one of the world’s largest producers of chicken, beef, and pork.
Why Is TSN Risky?
- Scale is a double-edged sword because it limits the company's growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 1.5% for the last three years
- Gross margin of 7% is below its competitors, leaving less money to invest in areas like marketing and production facilities
- Earnings per share have dipped by 27.6% annually over the past three years, which is concerning because stock prices follow EPS over the long term
At $56.15 per share, Tyson Foods trades at 15x forward P/E. Check out our free in-depth research report to learn more about why TSN doesn’t pass our bar.
TopBuild (BLD)
One-Month Return: -3.9%
Established in 2015 following a spinoff from Masco Corporation, TopBuild (NYSE: BLD) is a distributor and installer of insulation and other building products.
Why Does BLD Fall Short?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Sales are projected to tank by 2.6% over the next 12 months as demand evaporates
- Earnings per share lagged its peers over the last two years as they only grew by 7.7% annually
TopBuild is trading at $280.72 per share, or 13.6x forward P/E. To fully understand why you should be careful with BLD, check out our full research report (it’s free).
Enovis (ENOV)
One-Month Return: -13.2%
With a focus on helping patients regain or maintain their natural motion, Enovis (NYSE: ENOV) develops and manufactures medical devices for orthopedic care, from injury prevention and pain management to joint replacement and rehabilitation.
Why Do We Think ENOV Will Underperform?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 9.1% annually over the last five years
- Negative returns on capital show that some of its growth strategies have backfired, and its shrinking returns suggest its past profit sources are losing steam
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Enovis’s stock price of $29.65 implies a valuation ratio of 9x forward P/E. If you’re considering ENOV for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
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 9 Market-Beating Stocks. 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.
