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 where Wall Street’s pessimism is creating a buying opportunity and two where the outlook is warranted.
Two Stocks to Sell:
Horace Mann Educators (HMN)
Consensus Price Target: $56.50 (9.5% implied return)
Founded in 1945 and named after the 19th-century education reformer known as the "father of American public education," Horace Mann Educators (NYSE:HMN) is an insurance company that specializes in providing auto, property, life, and retirement products tailored for educators and other public service employees.
Why Is HMN Risky?
- Net premiums earned expanded by 6.4% annually over the last five years, falling below our expectations for the insurance sector
- Products and services are facing significant credit quality challenges during this cycle as book value per share has declined by 3.3% annually over the last five years
- Underwhelming 6.8% return on equity reflects management’s difficulties in finding profitable growth opportunities
At $51.61 per share, Horace Mann Educators trades at 1.3x forward P/B. If you’re considering HMN for your portfolio, see our FREE research report to learn more.
Cathay General Bancorp (CATY)
Consensus Price Target: $65.80 (2.5% implied return)
Founded in 1962 with its first branch in Los Angeles' Chinatown, Cathay General Bancorp (NASDAQ:CATY) operates Cathay Bank, providing commercial banking services to businesses and individuals with a strong presence in Asian-American communities.
Why Are We Cautious About CATY?
- Muted 6.6% annual net interest income growth over the last five years shows its demand lagged behind its banking peers
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 7.5% annually
- Projected tangible book value per share growth of 10% for the next 12 months suggests sluggish capital generation
Cathay General Bancorp’s stock price of $64.22 implies a valuation ratio of 1.4x forward P/B. Read our free research report to see why you should think twice about including CATY in your portfolio.
One Stock to Watch:
DHT Holdings (DHT)
Consensus Price Target: $20.52 (6.9% implied return)
With each vessel capable of carrying roughly 2 million barrels of oil—enough to fill about 125 Olympic swimming pools—DHT Holdings (NYSE:DHT) operates very large crude carriers that transport crude oil across international routes for energy companies and traders.
Why Could DHT Be a Winner?
- Annual revenue growth of 6.4% over the last ten years was superb and indicates its market share increased during this cycle
- EBITDA margin expanded by 34.6 percentage points over the last five years as it scaled and became more efficient
- Robust free cash flow margin of 28.8% gives it many options for capital deployment
DHT Holdings is trading at $19.20 per share, or 6.8x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
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-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.