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 is one stock poised to prove the bears wrong and two where the skepticism is well-placed.
Two Stocks to Sell:
Wendy's (WEN)
One-Month Return: -7.3%
Founded by Dave Thomas in 1969, Wendy’s (NASDAQ: WEN) is a renowned fast-food chain known for its fresh, never-frozen beef burgers, flavorful menu options, and commitment to quality.
Why Is WEN Not Exciting?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new diners into its restaurants
- Projected sales are flat for the next 12 months, implying demand will slow from its six-year trend
- 7× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
At $8.33 per share, Wendy's trades at 9.8x forward P/E. To fully understand why you should be careful with WEN, check out our full research report (it’s free for active Edge members).
H&R Block (HRB)
One-Month Return: -16%
Founded in 1955 by brothers Henry W. Bloch and Richard A. Bloch, H&R Block (NYSE: HRB) is a tax preparation company offering professional tax assistance and financial solutions to individuals and small businesses.
Why Do We Avoid HRB?
- Muted 5.3% annual revenue growth over the last five years shows its demand lagged behind its consumer discretionary peers
- Poor free cash flow margin of 16.7% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- ROIC hasn’t moved, making investors question whether its recent investments can increase profitability
H&R Block’s stock price of $43.88 implies a valuation ratio of 9x forward P/E. If you’re considering HRB for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
QuinStreet (QNST)
One-Month Return: -9.1%
Founded during the dot-com era in 1999 and specializing in high-intent consumer traffic, QuinStreet (NASDAQ: QNST) operates digital performance marketplaces that connect clients in financial and home services with consumers actively searching for their products.
Why Are We Backing QNST?
- Annual revenue growth of 40.1% over the last two years was superb and indicates its market share increased during this cycle
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 320% outpaced its revenue gains
- Free cash flow margin expanded by 4 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
QuinStreet is trading at $13.63 per share, or 12x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. 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 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% 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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