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. That said, here are three stocks where the outlook is warranted and some alternatives with better fundamentals.
Boise Cascade (BCC)
One-Month Return: -15.3%
Formed through the merger of two lumber companies, Boise Cascade Company (NYSE: BCC) manufactures and distributes wood products and other building materials.
Why Do We Avoid BCC?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 4.2% annually over the last two years
- Free cash flow margin dropped by 5.5 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Diminishing returns on capital suggest its earlier profit pools are drying up
Boise Cascade is trading at $72.08 per share, or 19.8x forward P/E. Dive into our free research report to see why there are better opportunities than BCC.
Alight (ALIT)
One-Month Return: -13.4%
Born from a corporate spinoff in 2017 to focus on employee experience technology, Alight (NYSE: ALIT) provides human capital management solutions that help companies administer employee benefits, payroll, and workforce management systems.
Why Is ALIT Risky?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.5% annually over the last five years
- Earnings per share have dipped by 6% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Alight’s stock price of $3.11 implies a valuation ratio of 5x forward P/E. Check out our free in-depth research report to learn more about why ALIT doesn’t pass our bar.
TowneBank (TOWN)
One-Month Return: -5.8%
Founded in 1998 with a commitment to community-centered banking in the Hampton Roads region, TowneBank (NASDAQ: TOWN) is a community-focused financial institution providing banking, lending, and wealth management services to individuals and businesses in Virginia and North Carolina.
Why Does TOWN Fall Short?
- 7.1% annual net interest income growth over the last five years was slower than its banking peers
- Costs have risen faster than its revenue over the last four years, causing its efficiency ratio to worsen by 12.1 percentage points
- Forecasted tangible book value per share decline of 3.5% for the upcoming 12 months implies profitability will deteriorate significantly
At $33.47 per share, TowneBank trades at 1.1x forward P/B. If you’re considering TOWN for your portfolio, see our FREE research report to learn more.
Stocks We Like More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 6 Stocks for this week. 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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