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 are three stocks where the outlook is warranted and some alternatives with better fundamentals.
AMC Entertainment (AMC)
One-Month Return: -11.6%
With a profile that was raised due to meme stock mania beginning in 2021, AMC Entertainment (NYSE:AMC) operates movie theaters primarily in the US and Europe.
Why Are We Out on AMC?
- Annual sales declines of 3.3% for the past five years show its products and services struggled to connect with the market
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
AMC Entertainment is trading at $2.72 per share, or 1.9x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including AMC in your portfolio.
Integra LifeSciences (IART)
One-Month Return: -22%
Founded in 1989 as a pioneer in regenerative medicine technology, Integra LifeSciences (NASDAQ:IART) develops and manufactures medical technologies for neurosurgery, wound care, and surgical reconstruction, including regenerative tissue products and surgical instruments.
Why Should You Sell IART?
- 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
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 1.4% annually
- Free cash flow margin shrank by 10.5 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
Integra LifeSciences’s stock price of $17.29 implies a valuation ratio of 6.7x forward price-to-earnings. To fully understand why you should be careful with IART, check out our full research report (it’s free).
Select Medical (SEM)
One-Month Return: -0.4%
With a nationwide network spanning 46 states and over 2,700 healthcare facilities, Select Medical (NYSE:SEM) operates critical illness recovery hospitals, rehabilitation hospitals, outpatient rehabilitation clinics, and occupational health centers across the United States.
Why Do We Think Twice About SEM?
- Declining admissions over the past two years imply it may need to invest in improvements to get back on track
- Sales are projected to tank by 17.4% over the next 12 months as demand evaporates
- Free cash flow margin shrank by 11.5 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
At $17 per share, Select Medical trades at 14.4x forward price-to-earnings. Check out our free in-depth research report to learn more about why SEM doesn’t pass our bar.
Stocks We Like More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.