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. That said, here is one stock where you should be greedy instead of fearful and two facing legitimate challenges.
Two Stocks to Sell:
Simpson (SSD)
Consensus Price Target: $191.67 (14.4% implied return)
Aiming to build safer and stronger buildings, Simpson (NYSE: SSD) designs and manufactures structural connectors, anchors, and other construction products.
Why Is SSD Not Exciting?
- Sales trends were unexciting over the last two years as its 2.6% annual growth was below the typical industrials company
- Free cash flow margin dropped by 10.7 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Simpson’s stock price of $167.56 implies a valuation ratio of 19.8x forward P/E. To fully understand why you should be careful with SSD, check out our full research report (it’s free).
U.S. Cellular (USM)
Consensus Price Target: $75.50 (-2% implied return)
Operating as a majority-owned subsidiary of Telephone and Data Systems since its founding in 1983, US Cellular (NYSE: USM) is a regional wireless telecommunications provider serving 4.6 million customers across 21 states with mobile phone, internet, and IoT services.
Why Is USM Risky?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 1.6% annually over the last five years
- Adjusted operating profits fell over the last five years as its sales dropped and it struggled to adjust its fixed costs
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
At $77.01 per share, U.S. Cellular trades at 7.7x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including USM in your portfolio.
One Stock to Buy:
Robinhood (HOOD)
Consensus Price Target: $118.80 (-13.2% implied return)
With a mission to democratize finance, Robinhood (NASDAQ: HOOD) is an online consumer finance platform known for its commission-free stock and crypto trading.
Why Are We Backing HOOD?
- Customer spending is rising as the company has focused on monetization over the last two years, leading to 40.9% annual growth in its average revenue per user
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 54.6% over the last three years outstripped its revenue performance
- Robust free cash flow margin of 67% gives it many options for capital deployment, and its improved cash conversion implies it’s becoming a less capital-intensive business
Robinhood is trading at $136.90 per share, or 58.6x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check 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 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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