3 Unpopular Stocks Walking a Fine Line

Wall Street’s bearish price targets for the stocks in this article signal serious concerns. Such forecasts are uncommon in an industry where maintaining cordial corporate relationships often trumps delivering the hard truth.

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. That said, here are three stocks where the outlook is warranted and some alternatives with better fundamentals.

Hershey (HSY)

Consensus Price Target: $229.65 (-1.5% implied return)

Best known for its milk chocolate bar and Hershey's Kisses, Hershey (NYSE:HSY) is an iconic company known for its chocolate products.

Why Is HSY Not Exciting?

1. Shrinking unit sales over the past two years show it’s struggled to move its products and had to rely on price increases
2. Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 13.5 percentage points
3. Performance over the past three years shows its incremental sales were much less profitable, as its earnings per share fell by 9.5% annually

Hershey is trading at $233.25 per share, or 27.3x forward P/E. Check out our free in-depth research report to learn more about why HSY doesn’t pass our bar.

MDU Resources (MDU)

Consensus Price Target: $22 (7.6% implied return)

Founded to provide electricity to towns in Minnesota, MDU Resources (NYSE:MDU) provides products and services in the utilities and construction materials industries.

Why Do We Steer Clear of MDU?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 19.5% annually over the last five years
2. Earnings per share have dipped by 15.9% annually over the past four years, which is concerning because stock prices follow EPS over the long term
3. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 13 percentage points

At $20.45 per share, MDU Resources trades at 21.2x forward P/E. If you’re considering MDU for your portfolio, see our FREE research report to learn more.

Essent Group (ESNT)

Consensus Price Target: $68.31 (12.5% implied return)

Serving as a crucial bridge between homebuyers and the American dream of homeownership, Essent Group (NYSE:ESNT) provides private mortgage insurance and title services that enable lenders to offer home loans with down payments of less than 20%.

Why Are We Wary of ESNT?

1. 2.7% annualized net premiums earned growth over the last five years lagged behind its insurance peers
2. Expenses have increased as a percentage of revenue over the last two years as its pre-tax profit margin fell by 9 percentage points
3. Incremental sales over the last two years were less profitable as its 3% annual earnings per share growth lagged its revenue gains

Essent Group’s stock price of $60.71 implies a valuation ratio of 0.9x forward P/B. Dive into our free research report to see why there are better opportunities than ESNT.

Stocks We Like More

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in our Top 6 Stocks for this week. 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 Kadant (+351% five-year return). Find your next big winner with StockStory today.