3 Unpopular Stocks We Approach with Caution

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. Keeping that in mind, here are three stocks where the skepticism is well-placed and some better opportunities to consider.

Calavo (CVGW)

Consensus Price Target: $27 (3.1% implied return)

A trailblazer in the avocado industry, Calavo Growers (NASDAQ:CVGW) is a pioneering California-based provider of high-quality avocados and other fresh food products.

Why Do We Pass on CVGW?

1. Annual revenue declines of 18.3% over the last three years indicate problems with its market positioning
2. Smaller revenue base of $648.4 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
3. Gross margin of 10% is an output of its commoditized products

At $26.20 per share, Calavo trades at 17x forward P/E. Read our free research report to see why you should think twice about including CVGW in your portfolio.

JLL (JLL)

Consensus Price Target: $372.60 (4.6% implied return)

Founded in 1999 through the merger of Jones Lang Wootton and LaSalle Partners, JLL (NYSE:JLL) is a company specializing in real estate advisory and investment management services.

Why Do We Think JLL Will Underperform?

1. Annual sales growth of 8.1% over the last five years lagged behind its consumer discretionary peers as its large revenue base made it difficult to generate incremental demand
2. Poor free cash flow margin of 2.8% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
3. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

JLL’s stock price of $356.36 implies a valuation ratio of 18.1x forward P/E. If you’re considering JLL for your portfolio, see our FREE research report to learn more.

Trex (TREX)

Consensus Price Target: $43.55 (0.3% implied return)

Addressing the demand for aesthetically-pleasing and unique outdoor living spaces, Trex Company (NYSE:TREX) makes wood-alternative decking, railing, and patio furniture.

Why Do We Steer Clear of TREX?

1. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
2. Free cash flow margin shrank by 6.1 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
3. Waning returns on capital imply its previous profit engines are losing steam

Trex is trading at $43.42 per share, or 28x forward P/E. Dive into our free research report to see why there are better opportunities than TREX.

High-Quality Stocks for All Market Conditions

Check out the high-quality names we’ve flagged in our 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 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.