Wall Street has issued downbeat forecasts for the stocks in this article. These predictions are rare - financial institutions typically hesitate to say bad things about a company because it can jeopardize their other revenue-generating business lines like 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. Keeping that in mind, here is one stock where you should be greedy instead of fearful and two facing legitimate challenges.

Two Stocks to Sell:

Genesco (GCO)

Consensus Price Target: $24.50 (8.1% implied return)

Spanning a broad range of styles, brands, and prices, Genesco (NYSE: GCO) sells footwear, apparel, and accessories through multiple brands and banners.

Why Do We Steer Clear of GCO?

1. Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
2. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
3. 8× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings

Genesco’s stock price of $22.67 implies a valuation ratio of 14.3x forward P/E. Read our free research report to see why you should think twice about including GCO in your portfolio.

AMC Entertainment (AMC)

Consensus Price Target: $2.92 (-14.4% implied return)

With a profile that was raised due to meme stock mania beginning in 2021, AMC Entertainment (NYSE: AMC) operates movie theaters primarily in the US and Europe.

Why Do We Think Twice About AMC?

1. Annual revenue declines of 2.7% over the last five years indicate problems with its market positioning
2. Cash-burning history makes us doubt the long-term viability of its business model
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

AMC Entertainment is trading at $3.41 per share, or 2.5x forward EV-to-EBITDA. If you’re considering AMC for your portfolio, see our FREE research report to learn more.

One Stock to Buy:

Federal Signal (FSS)

Consensus Price Target: $104.43 (5.2% implied return)

Developing sirens that warned of air raid attacks or fallout during the Cold War, Federal Signal (NYSE: FSS) provides safety and emergency equipment for government agencies, municipalities, and industrial companies.

Why Do We Love FSS?

1. Sales pipeline is in good shape as its backlog averaged 10.8% growth over the past two years
2. Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
3. Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 28.7% annually

At $99.26 per share, Federal Signal trades at 25.9x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

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.