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.
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 where the outlook is warranted.
Two Stocks to Sell:
Kraft Heinz (KHC)
One-Month Return: +0.5%
The result of a 2015 mega-merger between Kraft and Heinz, Kraft Heinz (NASDAQ: KHC) is a packaged foods giant whose products span coffee to cheese to packaged meat.
Why Do We Pass on KHC?
- Declining unit sales over the past two years suggest it might have to lower prices to stimulate growth
- Sales are projected to tank by 1.6% over the next 12 months as demand evaporates further
- Efficiency has decreased over the last year as its operating margin fell by 11.2 percentage points
Kraft Heinz is trading at $26.62 per share, or 9.9x forward P/E. Check out our free in-depth research report to learn more about why KHC doesn’t pass our bar.
LifeStance Health Group (LFST)
One-Month Return: -18.4%
With over 6,600 licensed mental health professionals treating more than 880,000 patients annually, LifeStance Health (NASDAQ: LFST) provides outpatient mental health services through a network of clinicians offering psychiatric evaluations, psychological testing, and therapy across 33 states.
Why Does LFST Fall Short?
- Revenue base of $1.28 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Cash burn makes us question whether it can achieve sustainable long-term growth
- Negative returns on capital show that some of its growth strategies have backfired
At $4.80 per share, LifeStance Health Group trades at 63x forward P/E. Dive into our free research report to see why there are better opportunities than LFST.
One Stock to Buy:
Erie Indemnity (ERIE)
One-Month Return: -4.1%
Operating under a unique business model dating back to 1925, Erie Indemnity (NASDAQ: ERIE) serves as the attorney-in-fact for Erie Insurance Exchange, managing policy issuance, claims handling, and investment services for this reciprocal insurer.
Why Will ERIE Outperform?
- Annual revenue growth of 15.6% over the past two years was outstanding, reflecting market share gains this cycle
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 34.9% over the last two years outstripped its revenue performance
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
Erie Indemnity’s stock price of $346.94 implies a valuation ratio of 4.7x trailing 12-month price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. 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
