3 Out-of-Favor Stocks We Think Twice About

Rock-bottom prices don't always mean rock-bottom businesses. The stocks we're examining today have all touched their 52-week lows, creating a classic investor's dilemma: bargain opportunity or value trap?

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 are three stocks where the skepticism is well-placed and some better opportunities to consider.

Caleres (CAL)

One-Month Return: -22.9%

The owner of Dr. Scholl's, Caleres (NYSE:CAL) is a footwear company offering a range of styles.

Why Do We Pass on CAL?

1. Products and services aren't resonating with the market as its revenue declined by 3.6% annually over the last two years
2. Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 2% for the last two years
3. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned

Caleres is trading at $11.03 per share, or 5x forward P/E. Read our free research report to see why you should think twice about including CAL in your portfolio.

ManpowerGroup (MAN)

One-Month Return: -21.8%

Founded during the post-World War II economic boom when businesses needed temporary workers, ManpowerGroup (NYSE:MAN) connects millions of people to employment opportunities through its global network of staffing, recruitment, and workforce management services.

Why Are We Out on MAN?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Earnings per share fell by 18.4% annually over the last five years while its revenue was flat, showing each sale was less profitable
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

ManpowerGroup’s stock price of $30.66 implies a valuation ratio of 8.8x forward P/E. If you’re considering MAN for your portfolio, see our FREE research report to learn more.

Employers Holdings (EIG)

One-Month Return: -10.5%

With roots in Nevada and a strong concentration in California where 45% of its premiums are generated, Employers Holdings (NYSE:EIG) is a specialty provider of workers' compensation insurance focused on small and select businesses engaged in low-to-medium hazard industries across the United States.

Why Do We Steer Clear of EIG?

1. Sluggish 3.3% annualized growth in net premiums earned over the last two years indicates the firm trailed its insurance peers
2. Expenses have increased as a percentage of revenue over the last five years as its combined ratio degraded by 18.2 percentage points
3. Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 8.3% annually

At $38.13 per share, Employers Holdings trades at 0.8x forward P/B. To fully understand why you should be careful with EIG, check out our full research report (it’s free for active Edge members).

Stocks We Like More

Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.

Don’t let fear keep you from great opportunities and take a look at Top 5 Growth Stocks for this month. 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-micro-cap company Kadant (+351% 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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