2 Unpopular Stocks That Deserve Some Love and 1 We Find Risky

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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 are two stocks where you should be greedy instead of fearful and one where the outlook is warranted.

One Stock to Sell:

Oaktree Specialty Lending (OCSL)

Consensus Price Target: $13.60 (-1.1% implied return)

Managed by Oaktree Capital Management, one of the world's premier alternative investment firms, Oaktree Specialty Lending (NASDAQ: OCSL) is a business development company that provides customized financing solutions to mid-market companies across various industries.

Why Do We Avoid OCSL?

  1. Annual sales declines of 1.9% for the past two years show its products and services struggled to connect with the market during this cycle
  2. Sales were less profitable over the last two years as its earnings per share fell by 10.6% annually, worse than its revenue declines
  3. Tangible book value per share tumbled by 1.7% annually over the last five years, showing financials sector trends are working against its favor during this cycle

Oaktree Specialty Lending’s stock price of $13.75 implies a valuation ratio of 8.3x forward P/E. If you’re considering OCSL for your portfolio, see our FREE research report to learn more.

Two Stocks to Watch:

Altria (MO)

Consensus Price Target: $62.88 (-7.1% implied return)

Best known for its Marlboro brand of cigarettes, Altria (NYSE: MO) offers tobacco and nicotine products.

Why Are We Positive On MO?

  1. Products command premium prices and lead to a best-in-class gross margin of 70.7%
  2. Highly efficient business model is illustrated by its impressive 54.6% operating margin
  3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends

At $67.68 per share, Altria trades at 12.2x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

Xylem (XYL)

Consensus Price Target: $157.56 (9.3% implied return)

Formed through a spinoff, Xylem (NYSE: XYL) manufactures and services engineered products across a wide variety of applications primarily in the water sector.

Why Do We Like XYL?

  1. Annual revenue growth of 20.1% over the past two years was outstanding, reflecting market share gains this cycle
  2. Superior product capabilities and pricing power lead to a stellar gross margin of 37.6%
  3. Earnings growth has trumped its peers over the last two years as its EPS has compounded at 15.9% annually

Xylem is trading at $144.20 per share, or 29.7x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.

Stocks We Like Even More

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-small-cap company Exlservice (+354% 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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