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. Keeping that in mind, here are two stocks where you should be greedy instead of fearful and one where the skepticism is well-placed.
One Stock to Sell:
Assured Guaranty (AGO)
One-Month Return: -2.4%
Serving as a financial safety net for over $11 trillion in debt service payments since its founding in 2003, Assured Guaranty (NYSE: AGO) provides credit protection products that guarantee scheduled payments on municipal bonds, infrastructure projects, and structured finance obligations.
Why Do We Steer Clear of AGO?
- 4.3% annual declines in net premiums earned for the past five years indicates policy sales struggled this cycle
- Projected sales decline of 29.8% over the next 12 months indicates demand will continue deteriorating
- Low return on equity reflects management’s struggle to allocate funds effectively
Assured Guaranty’s stock price of $81.65 implies a valuation ratio of 0.7x forward P/B. If you’re considering AGO for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Allison Transmission (ALSN)
One-Month Return: -5.8%
Helping build race cars at one point, Allison Transmission (NYSE: ALSN) offers transmissions to original equipment manufacturers and fleet operators.
Why Do We Like ALSN?
- Offerings are difficult to replicate at scale and lead to a best-in-class gross margin of 47.9%
- Healthy operating margin of 29.3% shows it’s a well-run company with efficient processes, and its rise over the last five years was fueled by some leverage on its fixed costs
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
At $82.29 per share, Allison Transmission trades at 10.3x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
EVERTEC (EVTC)
One-Month Return: -7.9%
Operating one of Latin America's leading PIN debit networks called ATH, EVERTEC (NYSE: EVTC) is a payment transaction processor and financial technology provider that enables merchants and financial institutions across Latin America and the Caribbean to accept and process electronic payments.
Why Should You Buy EVTC?
- Annual revenue growth of 18.2% over the last two years was superb and indicates its market share increased during this cycle
- Performance over the past two years shows its incremental sales were more profitable, as its annual earnings per share growth of 19.4% outpaced its revenue gains
- ROE punches in at 32.2%, illustrating management’s expertise in identifying profitable investments
EVERTEC is trading at $30.86 per share, or 8.7x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 9 Market-Beating Stocks. 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-small-cap company Comfort Systems (+782% 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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