SWK - Proceed With Caution When Considering These 5 Ultra-Popular Stocks
It's always a good idea to consider the downsides when buying stocks. That's not to say you shouldn't buy them -- just that when weighing those investments, you need to be aware of each one's downside risks as well as its upside potential. With that in mind, here's what investors should look out for when considering buying shares of Stanley Black & Decker (NYSE: SWK) , WD-40 (NASDAQ: WDFC) , Illinois Tool Works (NYSE: ITW) , 3M (NYSE: MMM) , and Boeing (NYSE: BA) right now.
Nothing has gone right for this maker of tools and outdoor products in 2022. Soaring costs for raw materials and transportation, a weakening consumer spending environment, and even poor weather hurt its sales volumes. That all led to a savage cut in full-year guidance, and disappointed investors have bid its shares steadily downward this year.
That said, management is taking action to cut costs by a whopping $2 billion within three years, and believes it can hit earnings of $7.25 per share in 2023. That has the stock trading today at 12.1 times its potential 2023 earnings. It's a compelling value proposition. Just be aware that companies often have to cut prices heavily when trying to reduce inventory. As such, Stanley could disappoint investors in the near term.
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Proceed With Caution When Considering These 5 Ultra-Popular Stocks