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.
General Mills (GIS)
One-Month Return: -4.6%
Best known for its portfolio of powerhouse breakfast cereal brands, General Mills (NYSE: GIS) is a packaged foods company that has also made a mark in cereals, baking products, and snacks.
Why Are We Hesitant About GIS?
- Declining unit sales over the past two years indicate demand is soft and that the company may need to revise its product strategy
- 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
- Projected sales decline of 4.3% for the next 12 months points to a tough demand environment ahead
At $55 per share, General Mills trades at 13x forward P/E. To fully understand why you should be careful with GIS, check out our full research report (it’s free).
JELD-WEN (JELD)
One-Month Return: -23.1%
Founded in the 1960s as a general wood-making company, JELD-WEN (NYSE: JELD) manufactures doors, windows, and other related building products.
Why Are We Out on JELD?
- 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
- 10.7 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
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
JELD-WEN’s stock price of $4 implies a valuation ratio of 6.7x forward P/E. Check out our free in-depth research report to learn more about why JELD doesn’t pass our bar.
3D Systems (DDD)
One-Month Return: -3.4%
Founded by the inventor of stereolithography, 3D Systems (NYSE: DDD) engineers, manufactures, and sells 3D printers and other related products to the aerospace, automotive, healthcare, and consumer goods industries.
Why Do We Think DDD Will Underperform?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 6.9% annually over the last five years
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
3D Systems is trading at $1.72 per share, or 0.6x forward price-to-sales. Dive into our free research report to see why there are better opportunities than DDD.
Stocks We Like More
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market 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 176% over the last five years.
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.
