The past year hasn't been kind to the stocks featured in this article. Each has tumbled to their lowest points in 12 months, leaving investors to decide whether they're witnessing fire sales or falling knives.
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 outlook is warranted and some alternatives with better fundamentals.
Flowers Foods (FLO)
One-Month Return: -7.9%
With Wonder Bread as its premier brand, Flower Foods (NYSE: FLO) is a packaged foods company that focuses on bakery products such as breads, buns, and cakes.
Why Do We Steer Clear of FLO?
- Shrinking unit sales over the past two years imply it may need to invest in product improvements to get back on track
- Sales are projected to tank by 1.3% over the next 12 months as demand evaporates
- Earnings per share fell by 21% annually over the last three years while its revenue grew, showing its incremental sales were much less profitable
Flowers Foods’s stock price of $8.90 implies a valuation ratio of 10.5x forward P/E. If you’re considering FLO for your portfolio, see our FREE research report to learn more.
Paramount (PSKY)
One-Month Return: -12%
Owner of Spongebob Squarepants and formerly known as ViacomCBS, Paramount Global (NASDAQ: PSKY) is a major media conglomerate offering television, film production, and digital content across various global platforms.
Why Do We Avoid PSKY?
- 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 2.7% for the last five years
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 2.7 percentage points over the next year
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Paramount is trading at $9.53 per share, or 12.4x forward P/E. Dive into our free research report to see why there are better opportunities than PSKY.
Chemed (CHE)
One-Month Return: -14.9%
With a unique business model combining end-of-life care and household services, Chemed (NYSE: CHE) operates two distinct businesses: VITAS, which provides hospice care for terminally ill patients, and Roto-Rooter, which offers plumbing and water restoration services.
Why Is CHE Not Exciting?
- Annual revenue growth of 4% over the last five years was below our standards for the healthcare sector
- Earnings per share lagged its peers over the last five years as they only grew by 3.6% annually
- Eroding returns on capital suggest its historical profit centers are aging
At $402.72 per share, Chemed trades at 16.7x forward P/E. To fully understand why you should be careful with CHE, check out our full research report (it’s free).
Stocks We Like More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
