Wall Street has issued downbeat forecasts for the stocks in this article. These predictions are rare - financial institutions typically hesitate to say bad things about a company because it can jeopardize their other revenue-generating business lines like M&A advisory.
Whatever the consensus opinion may be, our team at StockStory cuts through the noise by conducting independent analysis to determine a company’s long-term prospects. 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:
Timken (TKR)
Consensus Price Target: $89.39 (-1.3% implied return)
Established after the founder noticed the difficulty freight wagons had making sharp turns, Timken (NYSE:TKR) is a provider of industrial parts used across various sectors.
Why Do We Pass on TKR?
- 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
- Estimated sales growth of 2.7% for the next 12 months is soft and implies weaker demand
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
Timken’s stock price of $90.62 implies a valuation ratio of 15.3x forward P/E. Check out our free in-depth research report to learn more about why TKR doesn’t pass our bar.
Cathay General Bancorp (CATY)
Consensus Price Target: $54.20 (6.6% implied return)
Founded in 1962 with its first branch in Los Angeles' Chinatown, Cathay General Bancorp (NASDAQ:CATY) operates Cathay Bank, providing commercial banking services to businesses and individuals with a strong presence in Asian-American communities.
Why Are We Cautious About CATY?
- Sales tumbled by 1.7% annually over the last two years, showing market trends are working against its favor during this cycle
- Muted 5.4% annual net interest income growth over the last five years shows its demand lagged behind its banking peers
- Sales were less profitable over the last two years as its earnings per share fell by 7.5% annually, worse than its revenue declines
Cathay General Bancorp is trading at $50.84 per share, or 1.1x forward P/B. Dive into our free research report to see why there are better opportunities than CATY.
One Stock to Buy:
FTAI Aviation (FTAI)
Consensus Price Target: $247.40 (3.1% implied return)
With a focus on the CFM56 engine that powers Boeing and Airbus’s planes, FTAI Aviation (NASDAQ:FTAI) sells, leases, maintains, and repairs aircraft engines.
Why Is FTAI a Top Pick?
- Annual revenue growth of 43.9% over the past two years was outstanding, reflecting market share gains this cycle
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 82.4% annually, topping its revenue gains
- Negative free cash flow margin has improved over the last five years, showing the company is one step closer to financial self-sufficiency
At $240.03 per share, FTAI Aviation trades at 38.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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.