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3 Out-of-Favor Stocks with Red Flags

WOW Cover Image

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.

While market timing can be an extremely profitable strategy, it has burned many investors and requires rigorous analysis - something we specialize in at StockStory. Keeping that in mind, here are three stocks where the skepticism is well-placed and some better opportunities to consider.

WideOpenWest (WOW)

One-Month Return: -4%

Initially started in Denver as a cable television provider, WideOpenWest (NYSE: WOW) provides high-speed internet, cable, and telephone services to the Midwest and Southeast regions of the U.S.

Why Do We Steer Clear of WOW?

  1. Performance surrounding its subscribers has lagged its peers
  2. Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
  3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

WideOpenWest is trading at $4.06 per share, or 1.2x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why WOW doesn’t pass our bar.

American Woodmark (AMWD)

One-Month Return: -10.4%

Starting as a small millwork shop, American Woodmark (NASDAQ: AMWD) is a cabinet manufacturing company that helps customers from inspiration to installation.

Why Should You Dump AMWD?

  1. Customers postponed purchases of its products and services this cycle as its revenue declined by 9% annually over the last two years
  2. Sales are projected to tank by 2.7% over the next 12 months as its demand continues evaporating
  3. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term

At $50.84 per share, American Woodmark trades at 8.2x forward P/E. If you’re considering AMWD for your portfolio, see our FREE research report to learn more.

Graphic Packaging Holding (GPK)

One-Month Return: -6.4%

Founded in 1991, Graphic Packaging (NYSE: GPK) is a provider of paper-based packaging solutions for a wide range of products.

Why Are We Out on GPK?

  1. Declining unit sales over the past two years imply it may need to invest in improvements to get back on track
  2. Earnings per share have dipped by 5.7% annually over the past two years, which is concerning because stock prices follow EPS over the long term
  3. Free cash flow margin dropped by 10.8 percentage points over the last five years, implying the company became more capital intensive as competition picked up

Graphic Packaging Holding’s stock price of $21.14 implies a valuation ratio of 8.6x forward P/E. Dive into our free research report to see why there are better opportunities than GPK.

High-Quality Stocks for All Market Conditions

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Strong Momentum 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-small-cap company Exlservice (+354% 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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