Wall Street’s bearish price targets for the stocks in this article signal serious concerns. Such forecasts are uncommon in an industry where maintaining cordial corporate relationships often trumps delivering the hard truth.

Whatever the consensus opinion may be, our team at StockStory cuts through the noise by conducting independent analysis to determine a company’s long-term prospects. Keeping that in mind, here is one stock where you should be greedy instead of fearful and two where the skepticism is well-placed.

Two Stocks to Sell:

Arrow Electronics (ARW)

Consensus Price Target: $118.26 (2.4% implied return)

Founded as a single retail store, Arrow Electronics (NYSE:ARW) provides electronic components and enterprise computing solutions to businesses globally.

Why Is ARW Risky?

1. Flat sales over the last five years suggest it must find different ways to grow during this cycle

2. Earnings per share have contracted by 32.1% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance

3. Diminishing returns on capital suggest its earlier profit pools are drying up

Arrow Electronics is trading at $115.46 per share, or 9.8x forward P/E. If you’re considering ARW for your portfolio, see our FREE research report to learn more.

Avnet (AVT)

Consensus Price Target: $51.25 (5.2% implied return)

With a century-long history of adapting to technological evolution, Avnet (NASDAQ:AVT) is a global electronic components distributor that connects manufacturers of semiconductors and other electronic parts with businesses that need these components.

Why Does AVT Give Us Pause?

1. Sales tumbled by 8.3% annually over the last two years, showing market trends are working against its favor during this cycle

2. Earnings per share have dipped by 31% annually over the past two years, which is concerning because stock prices follow EPS over the long term

3. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital

Avnet’s stock price of $48.71 implies a valuation ratio of 9.7x forward P/E. To fully understand why you should be careful with AVT, check out our full research report (it’s free).

One Stock to Buy:

Amphenol (APH)

Consensus Price Target: $85.26 (5.5% implied return)

With over 90 years of connecting the world's technologies, Amphenol (NYSE:APH) designs and manufactures connectors, cables, sensors, and interconnect systems that enable electrical and electronic connections across virtually every industry.

Why Are We Backing APH?

1. Market share has increased this cycle as its 15.2% annual revenue growth over the last two years was exceptional

2. Dominant market position is represented by its $16.78 billion in revenue and gives it fixed cost leverage when sales grow

3. Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 19% annually