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1 Unpopular Stock That Should Get More Attention and 2 We Brush Off

SITE Cover Image

When Wall Street turns bearish on a stock, it’s worth paying attention. These calls stand out because analysts rarely issue grim ratings on companies for fear their firms will lose out in other business lines such as M&A advisory.

Accurately determining a company’s long-term prospects isn’t easy, especially when sentiment is weak. That’s where StockStory comes in - to help you find attractive investment candidates backed by unbiased research. That said, here is one stock where Wall Street’s pessimism is creating a buying opportunity and two where the outlook is warranted.

Two Stocks to Sell:

SiteOne (SITE)

Consensus Price Target: $153.90 (6.9% implied return)

Known for distributing John Deere tractors and LESCO turf care products, SiteOne Landscape Supply (NYSE: SITE) provides landscaping products and services to professionals, including irrigation, lighting, and nursery supplies.

Why Does SITE Fall Short?

  1. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
  2. Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 12.2% annually
  3. Eroding returns on capital suggest its historical profit centers are aging

SiteOne’s stock price of $143.91 implies a valuation ratio of 34.8x forward P/E. If you’re considering SITE for your portfolio, see our FREE research report to learn more.

Corning (GLW)

Consensus Price Target: $68.25 (1.8% implied return)

Supplying windows for some of the United States’s earliest spacecraft, Corning (NYSE: GLW) provides glass and other electronic components for the consumer electronics, telecommunications, automotive, and healthcare industries.

Why Is GLW Not Exciting?

  1. Annual sales growth of 4% over the last two years lagged behind its industrials peers as its large revenue base made it difficult to generate incremental demand
  2. 4.1 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
  3. Underwhelming 5.9% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its decreasing returns suggest its historical profit centers are aging

At $67.04 per share, Corning trades at 26.7x forward P/E. Dive into our free research report to see why there are better opportunities than GLW.

One Stock to Watch:

Hamilton Insurance Group (HG)

Consensus Price Target: $25.43 (8.6% implied return)

Founded in 2013 and operating through three distinct underwriting platforms across four countries, Hamilton Insurance Group (NYSE: HG) operates global specialty insurance and reinsurance platforms across Lloyd's, Ireland, Bermuda, and the United States.

Why Does HG Stand Out?

  1. Market share has increased this cycle as its 49.7% annual revenue growth over the last two years was exceptional
  2. Strong 26% annualized net premiums earned expansion over the last two years shows it’s capturing market share this cycle
  3. Pre-tax profits increased over the last two years as the company gained some leverage on its fixed costs and became more efficient

Hamilton Insurance Group is trading at $23.42 per share, or 0.9x forward P/B. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

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