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 you should be greedy instead of fearful and two where the outlook is warranted.
Two Stocks to Sell:
IBM (IBM)
One-Month Return: -4.9%
With a corporate history spanning over a century and once known for its iconic mainframe computers, IBM (NYSE: IBM) provides hybrid cloud computing platforms, AI solutions, consulting services, and enterprise infrastructure to help businesses modernize their operations.
Why Are We Hesitant About IBM?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 4.5% over the last five years was below our standards for the business services sector
- Estimated sales growth of 4.8% for the next 12 months is soft and implies weaker demand
- Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 6.7% annually
IBM is trading at $231.31 per share, or 18x forward P/E. If you’re considering IBM for your portfolio, see our FREE research report to learn more.
CoStar (CSGP)
One-Month Return: -12.2%
With a research department that makes over 10,000 property updates daily to its 35-year-old database, CoStar Group (NASDAQ: CSGP) provides comprehensive real estate data, analytics, and online marketplaces for commercial and residential properties in the U.S. and U.K.
Why Does CSGP Give Us Pause?
- Earnings per share fell by 1.6% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- Free cash flow margin dropped by 17.4 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
CoStar’s stock price of $34.81 implies a valuation ratio of 23.3x forward P/E. To fully understand why you should be careful with CSGP, check out our full research report (it’s free).
One Stock to Watch:
Zoetis (ZTS)
One-Month Return: -2%
Originally spun off from Pfizer in 2013 as the world's largest pure-play animal health company, Zoetis (NYSE: ZTS) discovers, develops, and sells medicines, vaccines, diagnostic products, and services for pets and livestock animals worldwide.
Why Are We Fans of ZTS?
- Business is well-positioned no matter the global macroeconomic backdrop as its constant currency revenue growth averaged 9.1% over the past two years
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its rising cash conversion increases its margin of safety
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
At $114.91 per share, Zoetis trades at 16.2x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it's flagging for this month - FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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.
