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 is one stock where you should be greedy instead of fearful and two where the outlook is warranted.
Two Stocks to Sell:
UniFirst (UNF)
One-Month Return: -7.4%
With a fleet of trucks making weekly deliveries to over 300,000 customer locations, UniFirst (NYSE:UNF) provides, rents, cleans, and maintains workplace uniforms and protective clothing for businesses across various industries.
Why Does UNF Worry Us?
- Estimated sales growth of 1% for the next 12 months implies demand will slow from its two-year trend
- Incremental sales over the last five years were less profitable as its earnings per share were flat while its revenue grew
- Low returns on capital reflect management’s struggle to allocate funds effectively, and its falling returns suggest its earlier profit pools are drying up
At $158.35 per share, UniFirst trades at 19x forward P/E. Read our free research report to see why you should think twice about including UNF in your portfolio.
Two Harbors Investment (TWO)
One-Month Return: -4%
Operating in the complex world of mortgage finance since 2009, Two Harbors Investment (NYSE:TWO) is a real estate investment trust that invests in mortgage servicing rights and agency residential mortgage-backed securities.
Why Do We Avoid TWO?
- Net interest income tumbled by 47.1% annually over the last five years, showing market trends are working against its favor during this cycle
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 16.1% annually while its revenue grew
- Loan losses and capital returns have eroded its tangible book value per share this cycle as its tangible book value per share declined by 14.6% annually over the last five years
Two Harbors Investment’s stock price of $9.76 implies a valuation ratio of 0.8x forward P/B. Check out our free in-depth research report to learn more about why TWO doesn’t pass our bar.
One Stock to Buy:
F&G Annuities & Life (FG)
One-Month Return: -14.7%
Founded in 1959 and serving approximately 677,000 policyholders who rely on its financial protection products, F&G Annuities & Life (NYSE:FG) provides fixed annuities, life insurance, and pension risk transfer solutions to retail and institutional clients.
Why Will FG Outperform?
- Net premiums earned expanded by 19.7% annually over the last two years, demonstrating exceptional market penetration this cycle
- Impressive 28.2% annual book value per share growth over the last two years indicates it’s building equity value this cycle
- Capital strength is on track to rise over the next 12 months as its 48.8% projected book value per share growth implies profitability will accelerate from its two-year trend
F&G Annuities & Life is trading at $29.28 per share, or 0.9x forward P/B. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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