3 Unpopular Stocks with Open Questions

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. That said, here are three stocks facing legitimate challenges and some alternatives worth exploring instead.

A. O. Smith (AOS)

Consensus Price Target: $79.91 (14.4% implied return)

Credited with the invention of the glass-lined water heater, A.O. Smith (NYSE:AOS) manufactures water heating and treatment products for various industries.

Why Does AOS Give Us Pause?

1. Sales stagnated over the last two years and signal the need for new growth strategies
2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 3.6%
3. Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 2.2% annually

A. O. Smith is trading at $69.87 per share, or 17.6x forward P/E. Read our free research report to see why you should think twice about including AOS in your portfolio.

General Dynamics (GD)

Consensus Price Target: $394.53 (10.8% implied return)

Creator of the famous M1 Abrahms tank, General Dynamics (NYSE:GD) develops aerospace, marine systems, combat systems, and information technology products.

Why Are We Cautious About GD?

1. The company has faced growth challenges as its 6.7% annual revenue increases over the last five years fell short of other industrials companies
2. Estimated sales growth of 4.1% for the next 12 months implies demand will slow from its two-year trend
3. Earnings per share lagged its peers over the last five years as they only grew by 7% annually

General Dynamics’s stock price of $356.14 implies a valuation ratio of 22.3x forward P/E. Dive into our free research report to see why there are better opportunities than GD.

United Natural Foods (UNFI)

Consensus Price Target: $42.38 (13.6% implied return)

With a vast network of 55 distribution centers spanning approximately 30 million square feet of warehouse space, United Natural Foods (NYSE:UNFI) is North America's premier grocery wholesaler distributing natural, organic, and conventional products to over 30,000 retail locations across the US and Canada.

Why Should You Sell UNFI?

1. Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 1.8% over the last three years was below our standards for the consumer staples sector
2. Performance over the past three years shows its incremental sales were much less profitable, as its earnings per share fell by 29.3% annually
3. High net-debt-to-EBITDA ratio of 5× could force the company to raise capital at unfavorable terms if market conditions deteriorate

At $37.32 per share, United Natural Foods trades at 14x forward P/E. If you’re considering UNFI for your portfolio, see our FREE research report to learn more.

Stocks We Like More

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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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.