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3 Out-of-Favor Stocks We Find Risky
Rock-bottom prices don’t always mean rock-bottom businesses. The stocks we’re examining today have all touched their 52-week lows, creating a classic investor’s dilemma: bargain opportunity or value trap?
At StockStory, we dig beneath the surface of price movements to uncover whether a company’s fundamentals justify its current valuation or suggest hidden potential. That said, here are three stocks where the outlook is warranted and some alternatives with better fundamentals.
Fiverr (FVRR)
One-Month Return: -18.2%
Based in Tel Aviv, Fiverr (NYSE:FVRR) operates a fixed price global freelance marketplace for digital services.
Why Does FVRR Worry Us?
- Intense competition is diverting traffic from its platform as its active buyers fell by 14% annually
- Sales are projected to tank by 23% over the next 12 months as demand evaporates
- Highly competitive market means it’s on the never-ending treadmill of sales and marketing spend
Fiverr is trading at $9.06 per share, or 1.2x forward price-to-gross profit. Read our free research report to see why you should think twice about including FVRR in your portfolio.
Procter & Gamble (PG)
One-Month Return: -1.1%
Founded by candle maker William Procter and soap maker James Gamble, Procter & Gamble (NYSE:PG) is a consumer products behemoth whose product portfolio spans everything from facial tissues to laundry detergent to feminine care to men’s grooming.
Why Are We Wary of PG?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 1.9%
- Operating margin didn’t move over the last year, showing it couldn’t increase its efficiency
Procter & Gamble’s stock price of $144.43 implies a valuation ratio of 20.6x forward P/E. To fully understand why you should be careful with PG, check out our full research report (it’s free).
Martin Marietta Materials (MLM)
One-Month Return: -5%
Operating one of North America's largest networks of quarries, including 14 underground mines, Martin Marietta Materials (NYSE:MLM) is a natural resource-based building materials company that supplies aggregates, cement, and other construction materials for infrastructure and building projects.
Why Does MLM Give Us Pause?
- Sales were flat over the last two years, indicating it’s failed to expand this cycle
- Earnings per share were flat over the last two years and fell short of the peer group average
- Low returns on capital reflect management’s struggle to allocate funds effectively, and its shrinking returns suggest its past profit sources are losing steam
At $544.84 per share, Martin Marietta Materials trades at 27.7x forward P/E. If you’re considering MLM for your portfolio, see our FREE research report to learn more.
Stocks We Like 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 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.