When Wall Street turns bearish on a stock, it’s worth paying attention. These calls stand out because analysts rarely issue grim ratings on companies for fear their firms will lose out in other business lines such as 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 where the skepticism is well-placed.
Two Stocks to Sell:
Rockwell Automation (ROK)
Consensus Price Target: $349.38 (0.5% implied return)
One of the first companies to address industrial automation, Rockwell Automation (NYSE: ROK) sells products that help customers extract more efficiency from their machinery.
Why Should You Dump ROK?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Sales were less profitable over the last two years as its earnings per share fell by 8.9% annually, worse than its revenue declines
- Waning returns on capital imply its previous profit engines are losing steam
At $347.51 per share, Rockwell Automation trades at 30.6x forward P/E. Dive into our free research report to see why there are better opportunities than ROK.
Horace Mann Educators (HMN)
Consensus Price Target: $49 (8.7% implied return)
Founded in 1945 and named after the 19th-century education reformer known as the "father of American public education," Horace Mann Educators (NYSE: HMN) is an insurance company that specializes in providing auto, property, life, and retirement products tailored for educators and other public service employees.
Why Do We Pass on HMN?
- Growth in insurance policies was lackluster over the last five years as its 5.4% annual growth underperformed the typical financial institution
- Book value per share tumbled by 3.4% annually over the last five years, showing insurance sector trends are working against its favor during this cycle
- Below-average return on equity indicates management struggled to find compelling investment opportunities
Horace Mann Educators’s stock price of $45.09 implies a valuation ratio of 1.3x forward P/B. If you’re considering HMN for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Medpace (MEDP)
Consensus Price Target: $410.27 (-9.9% implied return)
Founded in 1992 as a scientifically-driven alternative to traditional contract research organizations, Medpace (NASDAQ: MEDP) provides outsourced clinical trial management and research services to help pharmaceutical, biotechnology, and medical device companies develop new treatments.
Why Is MEDP on Our Radar?
- Average organic revenue growth of 15.7% over the past two years demonstrates its ability to expand independently without relying on acquisitions
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
Medpace is trading at $455.50 per share, or 37.4x forward P/E. Is now a good 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.
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