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 where the outlook is warranted and some alternatives with better fundamentals.
Pangaea (PANL)
One-Month Return: -15%
Established in 1996, Pangaea Logistics (NASDAQ: PANL) specializes in global logistics and transportation services, focusing on the shipment of dry bulk cargoes.
Why Do We Pass on PANL?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 12.4% annually over the last two years
- Performance over the past two years was negatively impacted by new share issuances as its earnings per share dropped by 40.2% annually, worse than its revenue
- Free cash flow margin dropped by 5.4 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Pangaea is trading at $4.62 per share, or 4.1x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than PANL.
Generac (GNRC)
One-Month Return: -12.4%
With its name deriving from a combination of “generating” and “AC”, Generac (NYSE: GNRC) offers generators and other power products for residential, industrial, and commercial use.
Why Are We Out on GNRC?
- Annual sales declines of 3% for the past two years show its products and services struggled to connect with the market during this cycle
- Earnings per share have dipped by 1.2% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Waning returns on capital imply its previous profit engines are losing steam
Generac’s stock price of $114.28 implies a valuation ratio of 13.5x forward price-to-earnings. To fully understand why you should be careful with GNRC, check out our full research report (it’s free).
FTI Consulting (FCN)
One-Month Return: +1.2%
With a team of experts deployed across 30+ countries to tackle complex business challenges, FTI Consulting (NYSE: FCN) is a global business advisory firm that helps organizations manage change, mitigate risk, and resolve disputes across financial, legal, operational, and regulatory matters.
Why Do We Think Twice About FCN?
- Demand will likely fall over the next 12 months as Wall Street expects flat revenue
- Day-to-day expenses have swelled relative to revenue over the last five years as its adjusted operating margin fell by 2.1 percentage points
- 2.1 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
At $164.61 per share, FTI Consulting trades at 19x forward price-to-earnings. If you’re considering FCN for your portfolio, see our FREE research report to learn more.
Stocks We Like More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Axon (+711% five-year return). Find your next big winner with StockStory today for free.
