When Wall Street turns bearish on a stock, it’s worth paying attention. These calls stand out because analysts rarely issue grim ratings on companies for fear their firms will lose out in other business lines such as M&A advisory.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. That said, here is one stock where you should be greedy instead of fearful and two facing legitimate challenges.
Two Stocks to Sell:
onsemi (ON)
Consensus Price Target: $49.14 (-3.6% implied return)
Spun out of Motorola in 1999 and built through a series of acquisitions, onsemi (NASDAQ:ON) is a global provider of analog chips specializing in autos, industrial applications, and power management in cloud data centers.
Why Does ON Worry Us?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 10.6% annually over the last two years
- Forecasted revenue decline of 10.2% for the upcoming 12 months implies demand will fall even further
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 13.4% for the last two years
At $51 per share, onsemi trades at 18.6x forward P/E. Dive into our free research report to see why there are better opportunities than ON.
Astec (ASTE)
Consensus Price Target: $43 (7.4% implied return)
Inventing the first ever double-barrel hot-mix asphalt plant, Astec (NASDAQ:ASTE) provides machines and equipment for building roads, processing raw materials, and producing concrete.
Why Do We Steer Clear of ASTE?
- Sales pipeline suggests its future revenue growth won’t meet our standards as its backlog averaged 28.1% declines over the past two years
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 3.5%
- Free cash flow margin dropped by 8.1 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Astec’s stock price of $40.05 implies a valuation ratio of 14.3x forward P/E. Check out our free in-depth research report to learn more about why ASTE doesn’t pass our bar.
One Stock to Watch:
City Holding (CHCO)
Consensus Price Target: $121.80 (4.4% implied return)
With roots dating back to 1957 and a strategic presence along the I-64 and I-81 corridors, City Holding (NASDAQGS:CHCO) operates as a financial holding company providing banking, trust, and investment services through its subsidiary City National Bank across West Virginia, Kentucky, Virginia, and Ohio.
Why Is CHCO Interesting?
- 9.9% annual net interest income growth over the last four years surpassed the sector average as its products resonated with borrowers
- Net interest margin grew by 30.7 basis points (100 basis points = 1 percentage point) over the last two years, giving the company more chips to play with
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
City Holding is trading at $116.69 per share, or 2.1x forward P/B. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. 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