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1 Unpopular Stock That Deserves Some Love and 2 We Find Risky

UNF Cover Image

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:

UniFirst (UNF)

Consensus Price Target: $242 (-11.4% implied return)

With a fleet of trucks making weekly deliveries to over 300,000 customer locations, UniFirst (NYSE: UNF) provides, rents, cleans, and maintains workplace uniforms and protective clothing for businesses across various industries.

Why Does UNF Give Us Pause?

  1. Muted 3.5% annual revenue growth over the last two years shows its demand lagged behind its business services peers
  2. Anticipated sales growth of 2.5% for the next year implies demand will be shaky
  3. Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 2.1% annually

At $273.06 per share, UniFirst trades at 37.8x forward P/E. Check out our free in-depth research report to learn more about why UNF doesn’t pass our bar.

Chemed (CHE)

Consensus Price Target: $443 (11% implied return)

With a unique business model combining end-of-life care and household services, Chemed (NYSE: CHE) operates two distinct businesses: VITAS, which provides hospice care for terminally ill patients, and Roto-Rooter, which offers plumbing and water restoration services.

Why Is CHE Not Exciting?

  1. Muted 4% annual revenue growth over the last five years shows its demand lagged behind its healthcare peers
  2. Earnings growth underperformed the sector average over the last five years as its EPS grew by just 3.6% annually
  3. Eroding returns on capital suggest its historical profit centers are aging

Chemed is trading at $399.23 per share, or 16.8x forward P/E. To fully understand why you should be careful with CHE, check out our full research report (it’s free).

One Stock to Buy:

Cintas (CTAS)

Consensus Price Target: $218.06 (11% implied return)

Starting as a family business collecting and cleaning shop rags in Cincinnati, Cintas (NASDAQ: CTAS) provides corporate identity uniforms, facility services, and safety products to over one million businesses across North America.

Why Should You Buy CTAS?

  1. Impressive 9.3% annual revenue growth over the last five years indicates it’s winning market share this cycle
  2. Share repurchases over the last five years enabled its annual earnings per share growth of 15.6% to outpace its revenue gains
  3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends

Cintas’s stock price of $196.46 implies a valuation ratio of 38.5x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

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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.

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