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3 Out-of-Favor Stocks We Think Twice About

PPC Cover Image

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. That said, here are three stocks where the skepticism is well-placed and some better opportunities to consider.

Pilgrim's Pride (PPC)

One-Month Return: -12.1%

Offering everything from pre-marinated to frozen chicken, Pilgrim’s Pride (NASDAQ: PPC) produces, processes, and distributes chicken products to retailers and food service customers.

Why Does PPC Fall Short?

  1. Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 2.8% over the last three years was below our standards for the consumer staples sector
  2. Sales are projected to remain flat over the next 12 months as demand decelerates from its three-year trend
  3. Easily substituted products (and therefore stiff competition) result in an inferior gross margin of 11.8% that must be offset through higher volumes

Pilgrim's Pride is trading at $37.65 per share, or 8.1x forward P/E. To fully understand why you should be careful with PPC, check out our full research report (it’s free for active Edge members).

ABM (ABM)

One-Month Return: -1.1%

With roots dating back to 1909 as a window washing company, ABM Industries (NYSE: ABM) provides integrated facility management, infrastructure, and mobility solutions across various sectors including commercial, manufacturing, education, and aviation.

Why Does ABM Give Us Pause?

  1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
  2. Incremental sales over the last two years were less profitable as its 1.2% annual earnings per share growth lagged its revenue gains
  3. Free cash flow margin dropped by 6.4 percentage points over the last five years, implying the company became more capital intensive as competition picked up

At $44.98 per share, ABM trades at 11.4x forward P/E. Check out our free in-depth research report to learn more about why ABM doesn’t pass our bar.

Prudential (PRU)

One-Month Return: -3.7%

Recognized by its iconic Rock of Gibraltar logo symbolizing strength and stability since 1896, Prudential Financial (NYSE: PRU) provides life insurance, annuities, retirement solutions, investment management, and other financial services to individual and institutional customers globally.

Why Is PRU Risky?

  1. 2.3% annual declines in net premiums earned for the past five years indicates policy sales struggled this cycle
  2. Policy losses and capital returns have eroded its book value per share this cycle as its book value per share declined by 12.2% annually over the last five years
  3. Debt-to-equity ratio of 1.3× shows the firm has taken on excessive debt, leaving little room for error

Prudential’s stock price of $101.50 implies a valuation ratio of 1.1x forward P/B. Read our free research report to see why you should think twice about including PRU in your portfolio.

Stocks We Like More

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our Top 6 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-micro-cap company Tecnoglass (+1,754% 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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