1 Oversold Stock Ready to Bounce Back and 2 That Underwhelm

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.

Price charts only tell part of the story. Our team at StockStory evaluates each company's underlying fundamentals to separate temporary setbacks from structural declines. That said, here is one stock where the poor sentiment is creating a buying opportunity and two where the outlook is warranted.

Two Stocks to Sell:

Hormel Foods (HRL)

One-Month Return: -8.2%

Best known for its SPAM brand, Hormel (NYSE:HRL) is a packaged foods company with products that span meat, poultry, shelf-stable foods, and spreads.

Why Are We Hesitant About HRL?

1. Shrinking unit sales over the past two years imply it may need to invest in product improvements to get back on track
2. Gross margin of 16.7% is below its competitors, leaving less money to invest in areas like marketing and production facilities
3. Earnings per share decreased by more than its revenue over the last three years, showing each sale was less profitable

Hormel Foods is trading at $28.19 per share, or 16.2x forward P/E. To fully understand why you should be careful with HRL, check out our full research report (it’s free).

Hanesbrands (HBI)

One-Month Return: -12.4%

A classic American staple founded in 1901, Hanesbrands (NYSE: HBI) is a clothing company known for its array of basic apparel including innerwear and activewear.

Why Should You Dump HBI?

1. Constant currency growth was below our standards over the past two years, suggesting it might need to invest in product improvements to get back on track
2. Projected sales decline of 1.4% over the next 12 months indicates demand will continue deteriorating
3. Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable

At $4.08 per share, Hanesbrands trades at 7.9x forward P/E. If you’re considering HBI for your portfolio, see our FREE research report to learn more.

One Stock to Buy:

Chipotle (CMG)

One-Month Return: -26.6%

Born from a desire to offer quick meals with fresh, flavorful ingredients, Chipotle (NYSE:CMG) is a fast-food chain known for its healthy, Mexican-inspired cuisine and customizable dishes.

Why Will CMG Outperform?

1. Rapid rollout of new restaurants to capitalize on market opportunities makes sense given its strong same-store sales performance
2. Average same-store sales growth of 4.8% over the past two years indicates its restaurants are resonating with diners
3. Enormous revenue base of $11.58 billion provides significant leverage in supplier negotiations

Chipotle’s stock price of $42.76 implies a valuation ratio of 32.6x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.

Stocks We Like Even More

Trump’s April 2024 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking 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 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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