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.
Accurately determining a company’s long-term prospects isn’t easy, especially when sentiment is weak. That’s where StockStory comes in - to help you find attractive investment candidates backed by unbiased research. That said, here are two stocks where Wall Street’s pessimism is creating a buying opportunity and one facing legitimate challenges.
One Stock to Sell:
Helios (HLIO)
Consensus Price Target: $65.20 (14.1% implied return)
Founded on the principle of treating others as one wants to be treated, Helios (NYSE:HLIO) designs, manufactures, and sells motion and electronic control components for various sectors.
Why Do We Think HLIO Will Underperform?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Incremental sales over the last five years were less profitable as its earnings per share were flat while its revenue grew
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Helios’s stock price of $57.14 implies a valuation ratio of 20.9x forward P/E. Check out our free in-depth research report to learn more about why HLIO doesn’t pass our bar.
Two Stocks to Watch:
Humana (HUM)
Consensus Price Target: $287.38 (4.7% implied return)
With over 80% of its revenue derived from federal government contracts, Humana (NYSE:HUM) provides health insurance plans and healthcare services to approximately 17 million members, with a strong focus on Medicare Advantage plans for seniors.
Why Should You Buy HUM?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 12.8% annual sales growth over the last two years
- Dominant market position is represented by its $126.3 billion in revenue, which gives it negotiating power over membership pricing and reimbursement rates
- ROIC punches in at 34.4%, illustrating management’s expertise in identifying profitable investments
At $274.55 per share, Humana trades at 20.6x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free for active Edge members.
Cardinal Health (CAH)
Consensus Price Target: $218.60 (5.2% implied return)
Operating as a critical link in the healthcare supply chain since 1979, Cardinal Health (NYSE:CAH) distributes pharmaceuticals and manufactures medical products for hospitals, pharmacies, and healthcare providers across the global healthcare supply chain.
Why Do We Like CAH?
- Massive revenue base of $234.3 billion in a highly regulated sector makes the company difficult to replace, giving it meaningful negotiating power
- Estimated revenue growth of 12.1% for the next 12 months implies demand will accelerate from its two-year trend
- Earnings per share grew by 9.4% annually over the last five years and easily exceeded the peer group average
Cardinal Health is trading at $207.70 per share, or 20.9x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in 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 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.