Laser Focus World is an industry bedrock—first published in 1965 and still going strong. We publish original articles about cutting-edge advances in lasers, optics, photonics, sensors, and quantum technologies, as well as test and measurement, and the shift currently underway to usher in the photonic integrated circuits, optical interconnects, and copackaged electronics and photonics to deliver the speed and efficiency essential for data centers of the future.

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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

3 Consumer Stocks with Questionable Fundamentals

CLX Cover Image

Consumer staples stocks are solid insurance policies in frothy markets ripe for corrections. But recently, the industry has failed to do its job as it shed 15.3% over the past six months. This performance was significantly worse than the S&P 500’s 1.6% decline.

Investors should tread carefully as the low switching costs for everyday products mean that not all businesses are created equal. With that said, here are three consumer stocks we’re passing on.

Clorox (CLX)

Market Cap: $15.17 billion

Founded in 1913 with bleach as the sole product offering, Clorox (NYSE: CLX) today is a consumer products giant whose product portfolio spans everything from bleach to skincare to salad dressing to kitty litter.

Why Are We Wary of CLX?

  1. Flat sales over the last three years suggest it must innovate and find new ways to grow
  2. Projected sales decline of 1% for the next 12 months points to an even tougher demand environment ahead

Clorox is trading at $123.50 per share, or 16.9x forward P/E. Check out our free in-depth research report to learn more about why CLX doesn’t pass our bar.

Lancaster Colony (LANC)

Market Cap: $4.62 billion

Known for its frozen garlic bread and Parkerhouse rolls, Lancaster Colony (NASDAQ: LANC) sells bread, dressing, and dips to the retail and food service channels.

Why Does LANC Fall Short?

  1. Lackluster 5.4% annual revenue growth over the last three years indicates the company is losing ground to competitors
  2. Subscale operations are evident in its revenue base of $1.89 billion, meaning it has fewer distribution channels than its larger rivals
  3. Estimated sales growth of 1.7% for the next 12 months implies demand will slow from its three-year trend

At $167.40 per share, Lancaster Colony trades at 23.7x forward P/E. If you’re considering LANC for your portfolio, see our FREE research report to learn more.

The Honest Company (HNST)

Market Cap: $500.5 million

Co-founded by actress Jessica Alba, The Honest Company (NASDAQ: HNST) sells diapers and wipes, skin care products, and household cleaning products.

Why Does HNST Worry Us?

  1. Smaller revenue base of $389.4 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
  2. 6.6 percentage point decline in its free cash flow margin over the last year reflects the company’s increased investments to defend its market position
  3. Negative returns on capital show that some of its growth strategies have backfired

The Honest Company’s stock price of $4.58 implies a valuation ratio of 16.7x forward EV-to-EBITDA. To fully understand why you should be careful with HNST, check out our full research report (it’s free).

Stocks We Like 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 Growth Stocks for this month. 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 Comfort Systems (+782% 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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