Hitting a new 52-week low can be a pivotal moment for any stock. These floors often mark either the beginning of a turnaround story or confirmation that a company faces serious headwinds.
While market timing can be an extremely profitable strategy, it has burned many investors and requires rigorous analysis - something we specialize in at StockStory. That said, here is one stock where the poor sentiment is creating a buying opportunity and two where the outlook is warranted.
Two Industrials Stocks to Sell:
Array (ARRY)
One-Month Return: -20%
Going public in October 2020, Array (NASDAQ: ARRY) is a global manufacturer of ground-mounting tracking systems for utility and distributed generation solar energy projects.
Why Are We Out on ARRY?
- Declining unit sales over the past two years indicate demand is soft and that the company may need to revise its strategy
- Negative free cash flow raises questions about the return timeline for its investments
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Array is trading at $4.50 per share, or 5.8x forward price-to-earnings. To fully understand why you should be careful with ARRY, check out our full research report (it’s free).
Flowserve (FLS)
One-Month Return: -16.1%
Manufacturing the largest pump ever built for nuclear power generation, Flowserve (NYSE: FLS) manufactures and sells flow control equipment for various industries.
Why Does FLS Worry Us?
- Average backlog growth of 5.6% over the past two years was mediocre and suggests fewer customers signed long-term contracts
- Estimated sales growth of 5% for the next 12 months implies demand will slow from its two-year trend
- Earnings growth underperformed the sector average over the last five years as its EPS grew by just 4.1% annually
At $44 per share, Flowserve trades at 13.6x forward price-to-earnings. If you’re considering FLS for your portfolio, see our FREE research report to learn more.
One Industrials Stock to Watch:
Hubbell (HUBB)
One-Month Return: +1.8%
A respected player in the electrical segment, Hubbell (NYSE: HUBB) manufactures electronic products for the construction, industrial, utility, and telecommunications markets.
Why Are We Positive On HUBB?
- Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- Earnings growth has trumped its peers over the last two years as its EPS has compounded at 24.9% annually
- Industry-leading 25.1% return on capital demonstrates management’s skill in finding high-return investments, and its returns are climbing as it finds even more attractive growth opportunities
Hubbell’s stock price of $359.98 implies a valuation ratio of 20.4x forward price-to-earnings. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market 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 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.
