Hitting a new 52-week low can be a pivotal moment for any stock. These floors often mark either the beginning of a turnaround story or confirmation that a company faces serious headwinds.
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 are two stocks where the poor sentiment is creating a buying opportunity and one where the outlook is warranted.
One Stock to Sell:
A. O. Smith (AOS)
One-Month Return: -2.4%
Credited with the invention of the glass-lined water heater, A.O. Smith (NYSE:AOS) manufactures water heating and treatment products for various industries.
Why Does AOS Fall Short?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.6% annually over the last two years
- Earnings per share have contracted by 2.7% 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
A. O. Smith is trading at $56.43 per share, or 14.2x forward P/E. Check out our free in-depth research report to learn more about why AOS doesn’t pass our bar.
Two Stocks to Watch:
Booking (BKNG)
One-Month Return: -7.9%
Formerly known as The Priceline Group, Booking Holdings (NASDAQ:BKNG) is the world’s largest online travel agency.
Why Are We Fans of BKNG?
- Platform is difficult to replicate at scale and results in a best-in-class gross margin of 87%
- Disciplined cost controls and effective management resulted in a strong two-year EBITDA margin of 36.4%, and its rise over the last few years was fueled by some leverage on its fixed costs
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Booking’s stock price of $159.80 implies a valuation ratio of 10.9x forward EV/EBITDA. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
First Solar (FSLR)
One-Month Return: -11.8%
Headquartered in Arizona, First Solar (NASDAQ:FSLR) specializes in manufacturing solar panels and providing photovoltaic solar energy solutions.
Why Do We Love FSLR?
- Annual revenue growth of 19.5% over the last two years was superb and indicates its market share increased during this cycle
- Free cash flow flipped to positive over the last five years, showing the company has crossed a key inflection point
- Improving returns on capital reflect management’s ability to monetize investments
At $179.21 per share, First Solar trades at 8.5x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth 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-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.