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.
At StockStory, we dig beneath the surface of price movements to uncover whether a company's fundamentals justify its current valuation or suggest hidden potential. Keeping that in mind, here is one stock where the poor sentiment is creating a buying opportunity and two where the outlook is warranted.
Two Stocks to Sell:
DaVita (DVA)
One-Month Return: -4.4%
With over 2,600 dialysis centers across the United States and a presence in 13 countries, DaVita (NYSE: DVA) operates a network of dialysis centers providing treatment and care for patients with chronic kidney disease and end-stage kidney disease.
Why Does DVA Fall Short?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 2.7% over the last five years was below our standards for the healthcare sector
- Flat treatments over the past two years imply it may need to invest in improvements to get back on track
- Estimated sales growth of 3.4% for the next 12 months implies demand will slow from its two-year trend
At $134.39 per share, DaVita trades at 11.4x forward P/E. If you’re considering DVA for your portfolio, see our FREE research report to learn more.
Vimeo (VMEO)
One-Month Return: -0.3%
Originally launched in 2004 as a platform for filmmakers seeking a high-quality alternative to YouTube, Vimeo (NASDAQ: VMEO) provides cloud-based video creation, editing, hosting, and distribution software that helps businesses and creators make, manage, and share professional-quality videos.
Why Does VMEO Worry Us?
- Sales stagnated over the last two years and signal the need for new growth strategies
- Smaller revenue base of $415.4 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Push for growth has led to negative returns on capital, signaling value destruction
Vimeo is trading at $3.96 per share, or 21.5x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including VMEO in your portfolio.
One Stock to Watch:
Centene (CNC)
One-Month Return: -5.7%
Serving nearly 1 in 15 Americans through its government healthcare programs, Centene (NYSE: CNC) is a healthcare company that manages government-sponsored health insurance programs like Medicaid and Medicare for low-income and complex-needs populations.
Why Could CNC Be a Winner?
- Annual revenue growth of 14.2% over the last five years beat the sector average and underscores the unique value of its offerings
- Massive revenue base of $178.2 billion gives it meaningful leverage when negotiating reimbursement rates
- Returns on capital are increasing as management’s prior bets are starting to bear fruit
Centene’s stock price of $28.29 implies a valuation ratio of 7.1x forward P/E. 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 9 Market-Beating Stocks. 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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