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.
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 is one stock poised to prove Wall Street wrong and two where the skepticism is well-placed.
Two Stocks to Sell:
NOV (NOV)
Consensus Price Target: $22.24 (5.6% implied return)
With roots stretching back to 1862 when it began making equipment for early oil fields, NOV (NYSE: NOV) manufactures drilling rigs, drill bits, pumps, and other equipment used to drill oil and gas wells.
Why Do We Think Twice About NOV?
- Sales tumbled by 1.4% annually over the last ten years, showing market trends are working against it during this cycle
- Gross margin of 20.6% is below its competitors, leaving less money to invest in exploration and production
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 2.9% for the last five years
At $21.05 per share, NOV trades at 18.2x forward P/E. Read our free research report to see why you should think twice about including NOV in your portfolio.
Black Stone Minerals (BSM)
Consensus Price Target: $16 (7.4% implied return)
With roots dating to the late 1800s when railroads were expanding westward and land grants were common, Black Stone Minerals (NYSE: BSM) owns oil and natural gas mineral rights across the U.S., earning royalties when energy companies drill on its land.
Why Does BSM Worry Us?
- Modest revenue base of $459.5 million gives it less fixed cost leverage and fewer distribution channels than larger companies
- Day-to-day expenses have swelled relative to revenue over the last five years as its EBITDA margin fell by 5.9 percentage points
Black Stone Minerals is trading at $14.90 per share, or 14.8x forward P/E. To fully understand why you should be careful with BSM, check out our full research report (it’s free).
One Stock to Watch:
Marvell Technology (MRVL)
Consensus Price Target: $269.28 (21% implied return)
Moving away from low margin storage device management chips in one of the biggest semiconductor business model pivots of the past decade, Marvell Technology (NASDAQ: MRVL) is a fabless designer of special purpose data processing and networking chips used by data centers, communications carriers, enterprises, and autos.
Why Are We Fans of MRVL?
- Annual revenue growth of 33.8% over the last two years was superb and indicates its market share increased during this cycle
- Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 60.2%
- Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
Marvell Technology’s stock price of $222.58 implies a valuation ratio of 47.9x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
