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.
Whatever the consensus opinion may be, our team at StockStory cuts through the noise by conducting independent analysis to determine a company’s long-term prospects. Keeping that in mind, here is one stock where you should be greedy instead of fearful and two facing legitimate challenges.
Two Stocks to Sell:
Skyworks Solutions (SWKS)
Consensus Price Target: $72.44 (-3.4% implied return)
Result of a merger of Alpha Industries and the wireless communications division of Conexant, Skyworks Solutions (NASDAQ: SWKS) is a designer and manufacturer of chips used in smartphones, autos, and industrial applications to amplify, filter, and process wireless signals.
Why Do We Steer Clear of SWKS?
- Sales tumbled by 10.1% annually over the last two years, showing market trends are working against its favor during this cycle
- Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
- Costs have risen faster than its revenue over the last five years, causing its operating margin to decline by 21.5 percentage points
Skyworks Solutions’s stock price of $75 implies a valuation ratio of 16.6x forward P/E. If you’re considering SWKS for your portfolio, see our FREE research report to learn more.
Topgolf Callaway (MODG)
Consensus Price Target: $10.44 (3.6% implied return)
Formed between the merger of Callaway and Topgolf, Topgolf Callaway (NYSE:MODG) sells golf equipment and operates technology-driven golf entertainment venues.
Why Do We Avoid MODG?
- Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 39.2% annually
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
At $10.07 per share, Topgolf Callaway trades at 4x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why MODG doesn’t pass our bar.
One Stock to Buy:
Amphenol (APH)
Consensus Price Target: $140.18 (4.3% implied return)
With over 90 years of connecting the world's technologies, Amphenol (NYSE:APH) designs and manufactures connectors, cables, sensors, and interconnect systems that enable electrical and electronic connections across virtually every industry.
Why Will APH Outperform?
- Annual revenue growth of 29.7% over the last two years was superb and indicates its market share increased during this cycle
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 40.2% over the last two years outstripped its revenue performance
- Robust free cash flow margin of 15% gives it many options for capital deployment, and its improved cash conversion implies it’s becoming a less capital-intensive business
Amphenol is trading at $134.34 per share, or 35.7x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Growth Stocks for this month. 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
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