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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.
While market timing can be an extremely profitable strategy, it has burned many investors and requires rigorous analysis - something we specialize in at StockStory. Keeping that in mind, here are three stocks where the outlook is warranted and some alternatives with better fundamentals.
Avantor (AVTR)
One-Month Return: -21.3%
With roots dating back to 1904 and embedded in virtually every stage of scientific research and production, Avantor (NYSE:AVTR) provides mission-critical products, materials, and services to customers in biopharma, healthcare, education, and advanced technology industries.
Why Do We Think Twice About AVTR?
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Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
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Projected sales for the next 12 months are flat and suggest demand will be subdued
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Adjusted operating profits fell over the last two years as its sales dropped and it struggled to adjust its fixed costs
At $12.73 per share, Avantor trades at 11.8x forward price-to-earnings. Check out our free in-depth research report to learn more about why AVTR doesn’t pass our bar.
Korn Ferry (KFY)
One-Month Return: -9.4%
With clients including 97% of the S&P 100 and operations in 103 offices across 51 countries, Korn Ferry (NYSE:KFY) is a global consulting firm that helps organizations design optimal structures, recruit talent, develop leaders, and create effective compensation strategies.
Why Are We Out on KFY?
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Products and services are facing significant end-market challenges during this cycle as sales have declined by 2% annually over the last two years
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Estimated sales growth of 1.6% for the next 12 months is soft and implies weaker demand
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Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 8.1% annually, worse than its revenue
Korn Ferry’s stock price of $61.65 implies a valuation ratio of 12.1x forward price-to-earnings. If you’re considering KFY for your portfolio, see our FREE research report to learn more.
Robert Half (RHI)
One-Month Return: -18.3%
With roots dating back to 1948 as the first specialized recruiting firm for accounting and finance professionals, Robert Half (NYSE:RHI) provides specialized talent solutions and business consulting services, connecting skilled professionals with companies across various fields.