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 three stocks where the skepticism is well-placed and some better opportunities to consider.

Texas Instruments (TXN)

Consensus Price Target: $221.55 (4.7% implied return)

Headquartered in Dallas, Texas since the 1950s, Texas Instruments (NASDAQ: TXN) is the world’s largest producer of analog semiconductors.

Why Does TXN Worry Us?

1. Sales were flat over the last two years, indicating it’s failed to expand this cycle
2. Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 14.8 percentage points
3. 19.6 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

At $211.60 per share, Texas Instruments trades at 33.2x forward P/E. Dive into our free research report to see why there are better opportunities than TXN.

Applied Industrial (AIT)

Consensus Price Target: $309.17 (9.4% implied return)

Formerly called The Ohio Ball Bearing Company, Applied Industrial (NYSE: AIT) distributes industrial products–everything from power tools to industrial valves–and services to a wide variety of industries.

Why Does AIT Give Us Pause?

1. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
2. Projected sales growth of 5.2% for the next 12 months suggests sluggish demand
3. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 5% annually

Applied Industrial’s stock price of $282.55 implies a valuation ratio of 25.6x forward P/E. To fully understand why you should be careful with AIT, check out our full research report (it’s free).

NBT Bancorp (NBTB)

Consensus Price Target: $49.17 (15.1% implied return)

Tracing its roots back to 1856 when it first opened its doors in Norwich, New York, NBT Bancorp (NASDAQ: NBTB) is a community-oriented financial institution providing banking, wealth management, and insurance services to individuals and businesses across the northeastern United States.

Why Is NBTB Not Exciting?

1. 8.5% annual revenue growth over the last five years was slower than its banking peers
2. Muted 9.4% annual net interest income growth over the last five years shows its demand lagged behind its banking peers
3. Incremental sales over the last five years were less profitable as its 4.3% annual earnings per share growth lagged its revenue gains

NBT Bancorp is trading at $42.72 per share, or 1.1x forward P/B. Read our free research report to see why you should think twice about including NBTB in your portfolio.

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