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?
At StockStory, we dig beneath the surface of price movements to uncover whether a company’s fundamentals justify its current valuation or suggest hidden potential. That said, here is one stock poised to prove the bears wrong and two where the skepticism is well-placed.
Two Stocks to Sell:
Ollie's (OLLI)
One-Month Return: +10.6%
Often located in suburban or semi-rural shopping centers, Ollie’s Bargain Outlet (NASDAQ: OLLI) is a discount retailer that acquires excess inventory then sells at meaningful discounts.
Why Are We Cautious About OLLI?
- Revenue base of $2.73 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Operating margin was unchanged over the last year, suggesting it failed to gain leverage on its fixed costs
- Low returns on capital reflect management’s struggle to allocate funds effectively
Ollie’s stock price of $83.13 implies a valuation ratio of 17x forward P/E. Read our free research report to see why you should think twice about including OLLI in your portfolio.
MarketAxess (MKTX)
One-Month Return: -17.7%
Pioneering the shift from phone-based to electronic bond trading since 2000, MarketAxess (NASDAQ: MKTX) operates electronic trading platforms that enable institutional investors and broker-dealers to efficiently trade fixed-income securities like corporate and government bonds.
Why Does MKTX Fall Short?
- Sales trends were unexciting over the last five years as its 4% annual growth was below the typical financials company
- Incremental sales over the last five years were less profitable as its earnings per share were flat while its revenue grew
MarketAxess is trading at $116.31 per share, or 14.2x forward P/E. Dive into our free research report to see why there are better opportunities than MKTX.
One Stock to Watch:
Leidos (LDOS)
One-Month Return: -4.5%
Formed through the split of IT services company SAIC, Leidos (NYSE: LDOS) offers technology and engineering solutions such as military training systems for the defense, civil, and health markets.
Why Are We Fans of LDOS?
- Backlog has averaged 17.6% growth over the past two years, showing it has a pipeline of unfulfilled orders that will support revenue in the future
- Share repurchases over the last two years enabled its annual earnings per share growth of 22.4% to outpace its revenue gains
- Free cash flow margin grew by 5.1 percentage points over the last five years, giving the company more chips to play with
At $122.66 per share, Leidos trades at 9.8x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
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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.
