The past year hasn't been kind to the stocks featured in this article. Each has tumbled to their lowest points in 12 months, leaving investors to decide whether they're witnessing fire sales or falling knives.
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. Keeping that in mind, here is one stock where you should be greedy instead of fearful and two where the outlook is warranted.
Two Stocks to Sell:
Optimum Communications (OPTU)
One-Month Return: -8.7%
Based in Long Island City, Optimum Communications (NYSE: OPTU) is a telecommunications company offering cable, internet, telephone, and television services across the United States.
Why Do We Pass on OPTU?
- Number of broadband subscribers has disappointed over the past two years, indicating weak demand for its offerings
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
- High net-debt-to-EBITDA ratio of 8× increases the risk of forced asset sales or dilutive financing if operational performance weakens
At $1.50 per share, Optimum Communications trades at 7.8x forward EV-to-EBITDA. To fully understand why you should be careful with OPTU, check out our full research report (it’s free).
Whirlpool (WHR)
One-Month Return: -29.1%
Credited with introducing the first automatic washing machine, Whirlpool (NYSE: WHR) is a manufacturer of a variety of home appliances.
Why Do We Avoid WHR?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 4.4% annually over the last five years
- Free cash flow margin dropped by 7 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- 6× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
Whirlpool is trading at $61.39 per share, or 10.7x forward P/E. If you’re considering WHR for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
MercadoLibre (MELI)
One-Month Return: -9.5%
Originally started as an online auction platform, MercadoLibre (NASDAQ: MELI) is a one-stop e-commerce marketplace and fintech platform in Latin America.
Why Is MELI a Good Business?
- Monetization efforts are paying off as its average revenue per user has grown by 107% annually over the last two years
- Share repurchases over the last three years enabled its annual earnings per share growth of 60.4% to outpace its revenue gains
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its rising cash conversion increases its margin of safety
MercadoLibre’s stock price of $1,783 implies a valuation ratio of 16.8x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
