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.
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 is one stock where the poor sentiment is creating a buying opportunity and two where the skepticism is well-placed.
Two Stocks to Sell:
LKQ (LKQ)
One-Month Return: -3.2%
A global distributor of vehicle parts and accessories, LKQ (NASDAQ:LKQ) offers its customers a comprehensive selection of high-quality, affordably priced automobile products.
Why Is LKQ Risky?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Forecasted free cash flow margin suggests the company will fail to improve its cash conversion over the next year
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
At $28.56 per share, LKQ trades at 9.4x forward P/E. If you’re considering LKQ for your portfolio, see our FREE research report to learn more.
Equifax (EFX)
One-Month Return: -5.1%
Holding detailed financial records on over 800 million consumers worldwide and dating back to 1899, Equifax (NYSE:EFX) is a global data analytics company that collects, analyzes, and sells consumer and business credit information to lenders, employers, and other businesses.
Why Are We Wary of EFX?
- Day-to-day expenses have swelled relative to revenue over the last five years as its adjusted operating margin fell by 3.9 percentage points
- Earnings per share lagged its peers over the last five years as they only grew by 1.4% annually
Equifax’s stock price of $174.96 implies a valuation ratio of 19.4x forward P/E. Check out our free in-depth research report to learn more about why EFX doesn’t pass our bar.
One Stock to Buy:
Jack Henry (JKHY)
One-Month Return: -7.5%
Founded in 1976 by two entrepreneurs who saw the need for specialized banking software in the early days of financial computing, Jack Henry & Associates (NASDAQ:JKHY) provides technology solutions that help banks and credit unions innovate, differentiate, and compete while serving the evolving needs of their accountholders.
Why Are We Bullish on JKHY?
- Annual revenue growth of 7.7% over the last five years was above the sector average and underscores its products and services value to customers
- Share buybacks propelled its annual earnings per share growth to 17.5%, which outperformed its revenue gains over the last two years
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
Jack Henry is trading at $146.11 per share, or 20.8x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week – FREE. Get Our Top 9 Market-Beating 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
