Rock-bottom prices don't always mean rock-bottom businesses. The stocks we're examining today have all touched their 52-week lows, creating a classic investor's dilemma: bargain opportunity or value trap?

Price charts only tell part of the story. Our team at StockStory evaluates each company's underlying fundamentals to separate temporary setbacks from structural declines. Keeping that in mind, here is one stock where the poor sentiment is creating a buying opportunity and two facing legitimate challenges.

Two Stocks to Sell:

Krispy Kreme (DNUT)

One-Month Return: -9%

Famous for its Original Glazed doughnuts and parent company of Insomnia Cookies, Krispy Kreme (NASDAQ: DNUT) is one of the most beloved and well-known fast-food chains in the world.

Why Are We Out on DNUT?

1. Earnings per share have contracted by 100% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance
2. Cash-burning history makes us doubt the long-term viability of its business model
3. Short cash runway increases the probability of a capital raise that dilutes existing shareholders

At $2.63 per share, Krispy Kreme trades at 26.3x forward P/E. Dive into our free research report to see why there are better opportunities than DNUT.

Everest Group (EG)

One-Month Return: -3%

Rebranded from Everest Re in 2023 to reflect its evolution beyond just reinsurance, Everest Group (NYSE: EG) underwrites property and casualty reinsurance and insurance worldwide, serving insurance companies, corporations, and other clients across six continents.

Why Are We Hesitant About EG?

1. Estimated sales growth of 2.3% for the next 12 months implies demand will slow from its two-year trend
2. Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 16.5% annually
3. Estimated book value per share decline of 100% for the next 12 months implies a challenging profitability environment

Everest Group’s stock price of $336.78 implies a valuation ratio of 0.9x forward P/B. Read our free research report to see why you should think twice about including EG in your portfolio.

One Stock to Buy:

Booz Allen Hamilton (BAH)

One-Month Return: -3.4%

With roots dating back to 1914 and deep ties to nearly all U.S. cabinet-level departments, Booz Allen Hamilton (NYSE: BAH) provides management consulting, technology services, and cybersecurity solutions primarily to U.S. government agencies and military branches.

Why Are We Backing BAH?

1. Impressive 13.7% annual revenue growth over the last two years indicates it’s winning market share this cycle
2. Core business is healthy and doesn’t need acquisitions to boost sales as its organic revenue growth averaged 13% over the past two years
3. Share repurchases have amplified shareholder returns as its annual earnings per share growth of 14.9% exceeded its revenue gains over the last five years

Booz Allen Hamilton is trading at $102.65 per share, or 15x 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

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