3 Hated Stocks with Mounting Challenges
The past year hasn't been kind to the stocks featured in this article. Each has tumbled to their lowest points in 12 months, leaving investors to decide whether they're witnessing fire sales or falling knives.
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 outlook is warranted and some alternatives with better fundamentals.
One-Month Return: -13.3%
Founded in 1971, Marcus & Millichap (NYSE:MMI) specializes in commercial real estate investment sales, financing, research, and advisory services.
Why Is MMI Risky?
Products and services have few die-hard fans as sales have declined by 2.9% annually over the last five years
Cash-burning history makes us doubt the long-term viability of its business model
Diminishing returns on capital suggest its earlier profit pools are drying up
At $30.30 per share, Marcus & Millichap trades at 380.9x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than MMI.
One-Month Return: +2%
Founded in 1971, GMS (NYSE:GMS) distributes specialty building materials including wallboard, ceilings, and insulation products, to the construction industry.
Why Are We Hesitant About GMS?
Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
Estimated sales decline of 3.7% for the next 12 months implies a challenging demand environment
Earnings per share have contracted by 13.3% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
GMS's stock price of $72.06 implies a valuation ratio of 9.2x forward price-to-earnings. To fully understand why you should be careful with GMS, check out our full research report (it's free).
One-Month Return: -9%
Expanding its markets through acquisitions since its founding, Alamo (NSYE:ALG) designs, manufactures, and services vegetation management and infrastructure maintenance equipment for governmental, industrial, and agricultural use.
Why Does ALG Give Us Pause?
Annual revenue growth of 3.7% over the last two years was below our standards for the industrials sector
Demand is forecasted to shrink as its estimated sales for the next 12 months are flat
Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 4.9 percentage points
Alamo is trading at $169.04 per share, or 15.6x forward price-to-earnings. If you're considering ALG for your portfolio, see our FREE research report to learn more.
Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
27 minutes ago
- Yahoo
3 Reasons to Buy Floor & Decor Stock Like There's No Tomorrow
Floor & Decor's business model earned praise from an all-time great investor, and it has large expansion plans. The stock's valuation is more attractive than usual and it's unlikely to get much cheaper tomorrow. 10 stocks we like better than Floor & Decor › In 2017, home improvement retail chain Floor & Decor Holdings (NYSE: FND) went public. It only had about 70 locations and was still virtually unknown. And investors could have bought it at any time during the past eight years. But now it's time to buy Floor & Decor stock like there's no tomorrow. Of course, that's just an expression -- there will be a tomorrow for Floor & Decor, and I believe it will be great for shareholders. That's why I believe it's worth the investment today. But when it comes to buying the stock at an attractive price, I don't think that investors should necessarily wait until tomorrow, hoping for any entry point that's better than this. The valuation is my third reason to buy Floor & Decor stock today. But first allow me to explain two other reasons why it's a good buy right now. Before he passed away in 2023, Charlie Munger was renowned for being a great investor and one who was focused on business fundamentals. Therefore, when he praises a business model, it's a big deal. And in one of his final interviews, Munger praised Floor & Decor. There are two extremes in retail. One approach is to have a lot of little stores -- GameStop fits in this category. It ended 2024 with over 3,200 locations, which is massive. But each location only had just over $1 million in annual sales. The other approach is to have relatively few stores that handle massive volume, which is Floor & Decor's business model and what Munger loved about it. It follows the same logic as one of his favorite businesses, Costco Wholesale. Floor & Decor only has around 250 locations today and it only expects to have around 500 long term. But each is between 50,000 square feet and 80,000 square feet. And with $4.5 billion in overall trailing-12-month revenue, these 250 stores are certainly high volume. High-volume stores can serve Floor & Decor by creating operating leverage, leading to strong profitability. It's something to watch as the business grows. As mentioned, Floor & Decor is looking to grow to at least 500 locations in coming years. Here in 2025, it's looking to open 20 new stores, which is about 8% growth. But keep in mind that this growth is slow by this company's standards. Given the economic uncertainty right now, management pulled back on this year's plans. Ordinarily, shareholders can expect Floor & Decor to open new locations at a faster rate as it expands toward its long-term goal. But opening new stores isn't the only growth strategy. The company owns another business called Spartan Surfaces, which does flooring installations for commercial properties, such as hospitals. This is a great ancillary business idea for Floor & Decor. Circling back to the business model, there's a ceiling to the opportunity with its retail locations -- it doesn't want a lot of low-volume stores. But it can still leverage its infrastructure with this ancillary commercial business. Between sales growth, new stores, and newer ideas, I believe that Floor & Decor can double its revenue in the next five years or so. That's a good opportunity for investors. It's widely agreed that Home Depot is a great business, but even the most bullish shareholders would have to concede that its growth prospects are somewhat slim. Floor & Decor's growth outlook is much better. And yet, in spite of this, the price-to-sales (P/S) valuation for Home Depot stock is much more expensive. One might object to my valuation comparison, pointing to Home Depot's superior profit margins, which is true. That said, a growth company such as Floor & Decor shouldn't be expected to be optimized for profits in the same way as a mature business such as Home Depot. During the pandemic-fueled home improvement spending boom, Floor & Decor had a profit margin of over 8%, which is about what Home Depot's margin is now. Therefore, the company is capable of better -- it's proved it. And even during this period of sluggish flooring sales, it still has a profit margin of about 5%. In other words, Floor & Decor stock is cheap when looking at its growth prospects. Those who think it should be cheaper because of its lower profit margins might not be seeing the whole picture. I've long believed Floor & Decor is simple idea and yet a strong multibagger investment opportunity. That hasn't changed. But now that this American stock is trading at one of its cheapest valuations ever, and even at a discount to more mature businesses such as Home Depot, I believe now is the time to buy Floor & Decor stock like there's no tomorrow. Before you buy stock in Floor & Decor, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Floor & Decor wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $868,615!* Now, it's worth noting Stock Advisor's total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Jon Quast has positions in Floor & Decor. The Motley Fool has positions in and recommends Costco Wholesale and Home Depot. The Motley Fool has a disclosure policy. 3 Reasons to Buy Floor & Decor Stock Like There's No Tomorrow was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
36 minutes ago
- Yahoo
US, China to Resume Trade Talks With Focus on Rare Earth Exports
(Bloomberg) -- Supply Lines is a daily newsletter that tracks global trade. Sign up here. Next Stop: Rancho Cucamonga! Where Public Transit Systems Are Bouncing Back Around the World ICE Moves to DNA-Test Families Targeted for Deportation with New Contract Trump Said He Fired the National Portrait Gallery Director. She's Still There. US Housing Agency Vulnerable to Fraud After DOGE Cuts, Documents Warn Top trade negotiators from the US and China are set to hold fresh talks in London on Monday, offering a glimmer of hope that the world's two largest economies can defuse tensions over Chinese dominance in rare-earth minerals. Both sides have accused the other of reneging on a deal in Geneva in May where they tried to start dialing back their trade war. Relations have spiraled since President Donald Trump's return to the White House, stoking uncertainty for companies and investors. China said Saturday it approved some applications for rare-earth exports, without specifying which countries or industries were involved — after Trump said Friday that Chinese President Xi Jinping had agreed to restart the flow of minerals and magnets using the materials. 'We want the rare earths, the magnets that are crucial for cell phones and everything else to flow just as they did before the beginning of April and we don't want any technical details slowing that down,' Kevin Hassett, head of the National Economic Council at the White House, said Sunday on CBS's Face the Nation. 'And that's clear to them.' US-China trade tensions escalated this year as a series of duty hikes on each other's goods sent tariffs well above 100% before hitting a pause. While the Geneva deal was meant to pave the way for a broader de-escalation, subsequent talks quickly stalled amid mutual recriminations. The US complained about a decline in shipments of rare-earth magnets essential for American electric vehicles and defense systems, while China bristled at tightened US restrictions on artificial intelligence chips from Huawei Technologies Co., access to other advanced technologies and crackdowns on foreign students in the US. Trump's reprieve on US tariffs for Chinese goods runs out in August, unless he decides to extend it. If deals aren't reached, the White House has said Trump plans to restore tariff rates to the levels he first announced in April, or lower numbers that exceed the current 10% baseline. In London, US Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer will meet a Chinese delegation led by Vice Premier He Lifeng. Trump offered a positive spin on what has been a rollercoaster relationship since he took office in January, saying on social media that the talks should go 'very well.' While a call between Trump and Xi last week generated some hope on Wall Street for lower duties between the trading partners, investors' optimism was limited. While promising to reshape US trading relationships, the US president has reached only one new trade agreement — with the UK. The Geneva meeting underscored the challenge of deal-making between China and the US. 'There was confusion and misunderstanding or misinterpretation intentionally on both sides, depending on how you look at it, about what was agreed to,' said Josh Lipsky, chair of international economics at the Atlantic Council. 'They left too many things open to interpretation and they all paid the price for it in the intervening weeks.' After the two leaders spoke, the Chinese Foreign Ministry said Trump told Xi that Chinese students are welcome to study in the US. Trump later said it would be his 'honor' to welcome them. For now, Xi appears to be betting that a reset in ties will lead to tangible wins in the weeks and months ahead, including tariff reductions, an easing of export controls and a less-fraught tone. The US and China 'just want to get back to where they were in Switzerland with a few more agreements down on paper to actually understand what is gonna be licensed, what gets permitted, what doesn't,' Lipsky said. The SEC Pinned Its Hack on a Few Hapless Day Traders. The Full Story Is Far More Troubling Cavs Owner Dan Gilbert Wants to Donate His Billions—and Walk Again Is Elon Musk's Political Capital Spent? What Does Musk-Trump Split Mean for a 'Big, Beautiful Bill'? Cuts to US Aid Imperil the World's Largest HIV Treatment Program ©2025 Bloomberg L.P.
Yahoo
36 minutes ago
- Yahoo
Jim Cramer on Dutch Bros (BROS): 'Boy, Do I Like It'
We recently published a list of . In this article, we are going to take a look at where Dutch Bros Inc. (NYSE:BROS) stands against other stocks that Jim Cramer discusses. Acknowledging that they exited the position after making a 'lot of money' from the stock at Cramer's behest earlier, a caller asked if it was time to get back in Dutch Bros Inc. (NYSE:BROS). In response, he said: 'Okay, Christine Barone was in town the other day. I said hello to her. The stock's up on a real spike, was up really big yesterday. It's a very hot stock. I would suggest buying it down 5%, but boy, do I like it.' A closeup of a customer tasting a freshly-made cold brew coffee product from the company's shop. Dutch Bros Inc. (NYSE:BROS) operates drive-thru locations across the United States. The company manages these stores under different names, including Dutch Bros Coffee and Dutch Bros Rebel. On May 23, Cramer was similarly bullish on the stock when he was asked about the company, as he said: 'The Dutch Bros be going higher, sir. I mean, when they were on just last Friday, as a matter of fact, we had Christine Barone, and I thought she told a great story. The stock has had a nice dip, and you know what I say about that dip? I say [buy, buy, buy].' Overall, BROS ranks 1st on our list of stocks that Jim Cramer discusses. While we acknowledge the potential of BROS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey.
