The past year hasn’t been kind to the stocks featured in this article. Each has tumbled to its lowest point in 12 months, leaving investors to decide whether they’re witnessing fire sales or falling knives.
While market timing can be an extremely profitable strategy, it has burned many investors and requires rigorous analysis - something we specialize in at StockStory. 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:
Flowers Foods (FLO)
One-Month Return: -17.1%
With Wonder Bread as its premier brand, Flowers Foods (NYSE:FLO) is a packaged foods company that focuses on bakery products such as breads, buns, and cakes.
Why Do We Avoid FLO?
- Shrinking unit sales over the past two years suggest it might have to lower prices to stimulate growth
- Forecasted revenue decline of 3.1% for the upcoming 12 months implies demand will fall off a cliff
- Performance over the past three years shows its incremental sales were much less profitable, as its earnings per share fell by 24.3% annually
Flowers Foods is trading at $5.54 per share, or 8x forward P/E. Check out our free in-depth research report to learn more about why FLO doesn’t pass our bar.
D.R. Horton (DHI)
One-Month Return: -3.6%
One of the largest homebuilding companies in the U.S., D.R. Horton (NYSE:DHI) builds a variety of new construction homes across multiple markets.
Why Do We Pass on DHI?
- Product roadmap and go-to-market strategy need to be reconsidered as its backlog has averaged 3.6% declines over the past two years
- Earnings per share have contracted by 16% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- Waning returns on capital imply its previous profit engines are losing steam
At $137.12 per share, D.R. Horton trades at 12.4x forward P/E. Read our free research report to see why you should think twice about including DHI in your portfolio.
One Stock to Watch:
Cadre (CDRE)
One-Month Return: -12.6%
Originally known as Safariland, Cadre (NYSE:CDRE) specializes in manufacturing and distributing safety and survivability equipment for first responders.
Why Are We Positive on CDRE?
- Impressive 13.5% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Operating margin improvement of 6.7 percentage points over the last five years demonstrates its ability to scale efficiently
- Earnings growth has trumped its peers over the last four years as its EPS has compounded at 40.8% annually
Cadre’s stock price of $25.01 implies a valuation ratio of 17.6x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.