Wall Street has issued downbeat forecasts for the stocks in this article. These predictions are rare - financial institutions typically hesitate to say bad things about a company because it can jeopardize their other revenue-generating business lines like M&A advisory.
Accurately determining a company’s long-term prospects isn’t easy, especially when sentiment is weak. That’s where StockStory comes in - to help you find attractive investment candidates backed by unbiased research. Keeping that in mind, here are three stocks where the skepticism is well-placed and some better opportunities to consider.
Dover (DOV)
Consensus Price Target: $201.43 (8.8% implied return)
A company that manufactured critical equipment for the United States military during World War II, Dover (NYSE:DOV) manufactures engineered components and specialized equipment for numerous industries.
Why Should You Sell DOV?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 2.2% annually
- Free cash flow margin dropped by 3.3 percentage points over the last five years, implying the company became more capital intensive as competition picked up
At $185.12 per share, Dover trades at 19.4x forward P/E. Read our free research report to see why you should think twice about including DOV in your portfolio.
Henry Schein (HSIC)
Consensus Price Target: $76.39 (4.5% implied return)
With a vast inventory of over 300,000 products stocked in distribution centers spanning more than 5.3 million square feet worldwide, Henry Schein (NASDAQ:HSIC) is a global distributor of healthcare products and services primarily to dental practices, medical offices, and other healthcare facilities.
Why Is HSIC Not Exciting?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Anticipated sales growth of 3.3% for the next year implies demand will be shaky
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Henry Schein’s stock price of $73.13 implies a valuation ratio of 14.8x forward P/E. Check out our free in-depth research report to learn more about why HSIC doesn’t pass our bar.
OPENLANE (KAR)
Consensus Price Target: $23.83 (6.1% implied return)
Facilitating the sale of approximately 1.3 million used vehicles in 2023, OPENLANE (NYSE:KAR) operates digital marketplaces that connect sellers and buyers of used vehicles across North America and Europe, facilitating wholesale transactions.
Why Do We Steer Clear of KAR?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 7.9% annually over the last five years
- Free cash flow margin dropped by 11.7 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- High net-debt-to-EBITDA ratio of 6× increases the risk of forced asset sales or dilutive financing if operational performance weakens
OPENLANE is trading at $22.47 per share, or 22.3x forward P/E. Dive into our free research report to see why there are better opportunities than KAR.
High-Quality Stocks for All Market Conditions
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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.