Historically, family-owned stocks have outperformed the market. And it makes some sense why that’s the case — and why those controlled companies might be stocks to buy.

Family-owned companies generally have direct board oversight from family members. They’re less likely to take unwise risks, and by definition they’re more likely to have skin in the game. If an independent CEO is being compensated for share price gains, a major merger might seem a worthy gamble. If three of the board members are risking their family’s legacy on that deal, however, it might look very different.

As Credit Suisse (NYSE:CS) pointed out last year, family-owned companies outperform the market by a whopping 400 bps annually. The outperformance comes across sectors and company sizes. These 5 companies, too, represent a cross-section of the market. But all 5 look like stocks to buy.

Brown-Forman (BF.A) (BF.B)

Source: Bruce Tuten via Flickr

Distiller Brown-Forman (NYSE:BF.A,BF.B) is best known for its Jack Daniel’s whiskey. But like other liquor plays like Diageo (NYSE:DEO), BF stock has been an attractive investment for some time now. The company has raised its dividend for 34 consecutive years. And after a few years of relatively stagnant growth, Brown-Forman has shown much stronger performance of late.

New offerings like Jack Daniel’s Tennessee Honey are driving sales. A move to premium whiskey — including Gentleman Jack and Woodford Reserve — has been a winner as well. Revenue growth has accelerated to 6% in fiscal 2018 (on a constant-currency basis) and should rise 4%+ this year, with the company projecting 11-18% EPS growth.

Meanwhile, BF.A stock has become much cheaper in the market selloff of late, currently trading at a 10-month low. There are some near-term concerns about tariffs, which led FY19 EPS guidance to be pulled down. But those concerns should fade, and long-term investors should ride out any volatility by picking up Brown-Forman on the dip.

Adams Resources & Energy (AE)

Source: Wikipedia

Adams Resources & Energy (NYSE:AE) admittedly is a bit of a weird stock. The company’s primary Marketing business moves crude oil from the wellhead to end users, while a smaller transportation business trucks petrochemicals and other products through Texas and beyond.

The controlling Adams family has a bigger asset: the NFL’s Tennessee Titans (formerly the Houston Oilers). And it’s looked at times like Adams Resources has been forgotten. AE has a rising amount of cash — nearly $30 per share, against a current price of $41. Yet the dividend has been held steady, leaving that cash relatively dormant.

Still, there’s an intriguing bull case here, one reason I own the stock. Both the cash and a book value of $36 provide significant downside protection. A rebound in shale oil production and concerns about pipeline capacity could open new business for Adams. The company did acquire a trucking operation recently, perhaps signaling more aggressive capital allocation going forward. And a sale could be in the works at some point to a larger company. AE will require patience — but I still believe at some point that patience will pay off.

Nordstrom (JWN)

Source: Shutterstock

Even as a retail bear, I’m intrigued by Nordstrom (NYSE:JWN). The high-end retailer seems to have the most differentiated model in the department store space. It’s a brand notably different from that of a JCPenney (NYSE:JCP) or even a Macy’s (NYSE:M). As InvestorPlace’s Dana Blankenhorn pointed out in August, the company is aggressively reinventing itself as customers dress down — and succeeding in the process.

JWN is more expensive than those peers, but the premium is deserved. And the founding Nordstrom family remains on top of the story. It even tried to take JWN private at $50 — an offer the board refused.

With the stock now at $60, any weakness could see the family make another move, perhaps protecting the downside. In the meantime, investors own a well-run high-end business with a 2.4% dividend yield. That’s an attractive combination — particularly for retail bulls.

John B. Sanfilippo & Son (JBSS)

There are few, if any, public companies with tighter family control than nut processor and manufacturer John B. Sanfilippo & Sons (NASDAQ:JBSS). The founding family owns 89% of the non-traded Class A shares, giving it firm control from a voting standpoint. Members of the Sanfilippo family — including in-laws — comprise the majority of the board and upper management.

It might seem like there’s a risk that nepotism simply goes wild, but it’s actually been a hugely successful strategy for JBSS shareholders. The stock has moved from the single-digits as recently as the beginning of 2012 to a current price just under $70. Consistent special dividends mean that many long-time shareholders now own the stock for free — or even at a negative cost basis.

And returns should continue. The big gains have been driven by a shift toward manufacturing (the company owns the Fisher brand) instead of simply being a middleman in an industry with volatile pricing. That shift still has to play out. Newer brands like Orchard Valley Harvest capitalize on the “good for you” trend. JBSS trades at a discount to most snack companies — but its growth is better. A 14% pullback from August highs sets up a nice entry point as well.

Clearly, this is a management team worth betting on. When it comes to family-owned stocks, few have done it better than the Sanfilippos over the past few years.

Family-Owned Stocks to Buy: Estee Lauder (EL)

Source: Shutterstock

Estee Lauder (NYSE:EL) is one of the premier brands in the world. And like BF.A and BF.B, the market sell-off has moved it to an attractive, if still seemingly expensive, price.

EL briefly touched a 2018 low during this week’s market volatility, and still sits 19% below June highs. At 24x+ forward earnings, the valuation still looks high. But this is a company still steadily growing earnings double-digits, with room for expansion in developing markets (notably Asia) and market share gains in the U.S. and the U.K.

As a result, EL stock — like Estee Lauder cosmetics — is a classic case of paying up for quality. It’s not likely to be a decision that investors regret.

As of this writing, Vince Martin is long shares of Adams Resources & Energy. He has no positions in any other securities mentioned.

Small-cap stocks can be fertile ground for individual investors. Large-cap stocks tend to get the most coverage, but in small caps, investors can find an edge.

A lot of funds are simply too large to bother with stocks under a current market capitalization. The ‘story’ behind a smaller stock can be hidden, particularly with less media and Wall Street coverage. And volatility generally is higher — which sometimes moves a small-cap stock without any material news.

These 17 small-cap stocks all like hidden gems — possibly. To some degree, all 17 are high-risk stocks. But that’s usually the case with smaller companies. For these 17 small caps, the risks seem worth taking because all of them have a chance to double — and maybe quickly if all works out according to plan.

Smart & Final (SFS)

I recommended West Coast grocer Smart & Final (NYSE:SFS) last year as one of 10 2017 losers to buy in 2018. SFS went on to bounce nicely — but it’s given back those gains and then some, touching an all-time low in June before recovering over the past few months.

SFS has pulled back sharply over the past few sessions. But I’m not ready to give up on the small-cap stock just yet. There is still a case for big upside here. Comparable sales aren’t bad in a still deflationary environment, rising 1.3% in the first half of the year. Bears have pointed to competition from German retailer Aldi in the company’s core California markets as a major risk, but Smart & Final seems to be holding its own.

Meanwhile, the company’s Smart Foodservice Warehouse division serves mostly restaurants and commercial customers. This division continues to grow nicely. If S&F can get the supermarket business stabilized, and continue to grow the foodservice business through both same-store sales and new stores, there’s room for faster sales growth and margin expansion. At ~7x EBITDA and 13x forward EPS, that kind of growth simply isn’t priced in. And a reasonably leveraged balance sheet can magnify the gains in SFS stock.

Obviously, there are risks here. The grocery space is tough and getting tougher, and Aldi (which also owns Trader Joe’s), Albertsons, and Kroger (NYSE:KR) all provide tough competition. But for investors who see the pressure in the sector as overdone, SFS looks like the highest-reward play at the moment.

Overstock.com (OSTK)

On the surface, Overstock.com (NASDAQ:OSTK) simply looks like another one of the small-cap stocks that benefited from a cryptocurrency bubble and has come back down to Earth. OSTK traded below $20 last summer; by early January it had touched $90. The stock since has lost about 70% of its value as optimism toward its tZERO ICO platform has waned.

The pullback makes some sense. Q4 earnings in March were a big hit to the bull case, as I wrote at the time. Cryptocurrencies have dropped. The legacy e-commerce business continues to struggle with profitability. Recent weakness in SEO (search engine optimization) has added to the losses, and CEO Patrick Byrne said the company would focus on minimizing cash burn in the second half of the year after investments in the first two quarters.

Still, there’s an intriguing high-risk, high-reward case here. A private equity firm is investing in the company at $33 per OSTK share — a 20% premium to the current price. It’s also buying a stake in tZERO at a $1.5 billion valuation — more than double that of OSTK as a whole.

The gains to $90 obviously were too much; the pullback to $26 may be the same.

CryoLife (CRY)

CryoLife (NYSE:CRY) already has doubled since February, and isn’t cheap. CRY stock trades at more than 5x 2018 revenue guidance, and over 100x its EPS target for the year.

But there’s a solid long-term case here for CryoLife, which manufactures medical devices and distributes implantable tissues used in heart and vascular surgery. Growth continues to be impressive. Margins are relatively thin but should expand as operating expenses are leveraged going forward. Plus, a $1.3 billion market cap makes CRY a potential M&A target down the line and gives the company capital to do more acquisitions like last year’s buyout of Germany’s JOTEC.

Again, this isn’t one of the cheap small-cap stocks, and it may be that the market is on to the story here. But medtech plays can grow for a long time — and if CryoLife keeps on its current path, it could double once again.

M&A activity has been big part of the global market for the past few years now, and that’s likely to continue. Tax reform has freed up more cash and made potential targets more accretive. The economy is humming along. And in a few key sectors — consumer goods and media come to mind — there’s an obvious logic behind consolidation.

The old rules still apply as well. Older companies are looking to drive scale and cut costs. Newer companies are looking to expand their reach — or cash out by selling to one of those older companies looking to spark growth of their own.

With U.S. mergers actually down in 2017 — perhaps due to tax uncertainty — there’s some pent-up demand as well. And so this might be exactly the type of market to look for takeover stocks. These 18 stocks all have been rumored or reported targets. And in many (though not necessarily all) cases, the possibility of an acquisition doesn’t necessarily look priced in.

Takeover Stocks: BlackBerry (BB)

On this site late last year, Larry Ramer argued that BlackBerry (NYSE:BB) was a prime takeover target. Ramer isn’t alone in that argument. Noted short-seller Citron Research made a similar claim last year in arguing that BB stock had the potential to double.

Rumors of potential acquirers have swirled for some time. BlackBerry of course almost went private back in 2013 at $9-per-share. Two years later, the company reportedly was in talks with Samsung about an acquisition.

There’s still a logical takeover case for BlackBerry at the moment. The phone business is gone, leaving an attractive software business. The QNX operating system has a real role to play in ensuring security for autonomous driving. BlackBerry’s patents have real value, with potential upside from a filed suit against Facebook (NASDAQ:FB). And with over $2 billion in cash on the books, another go-private transaction could work as well.

BB stock, meanwhile, has pulled back below $10 despite a Q1 earnings beat. Investors are worried that the company’s turnaround simply isn’t progressing fast enough (indeed, I’ve made that argument myself). But with real value in the software and the nameplate, it simply may be that the turnaround could be better executed under different ownership.

Takeover Stocks: Lions Gate Entertainment (LGF.A, LGF.B)

The acquisition of Time Warner by AT&T (NYSE:T) has led to an belief that consolidation is coming in the media space. As James Brumley wrote last month:

“…the previous lines between media distribution, media creation, and content licensing have been completely wiped away. This is just the beginning of a heated M&A race, with all players knowing once-unthinkable partnerships are now going to be permitted.”

And so the owners of content look like attractive targets, and Lions Gate Entertainment (NYSE:LGF.A, NYSE:LGF.B) is high on the list. As Will Healy argued last month, its ownership of Starz, films such as The Hunger Games and TV programs, including Mad Menand Will & Grace all make Lions Gate an intriguing target for larger distributors.

LGF earnings have struggled a bit, and so has LGF stock. Analysts have abandoned the story of late. And investors likely will need a bit of patience. It seems likely that consolidation, if it comes, won’t kick into full gear until the drama between Comcast (NASDAQ:CMCSA), Disney (NYSE:DIS) and Twenty-First Century Fo (NASDAQ:FOX, NASDAQ:FOXA) has completed. But for investors who believe that consolidation is inevitable, LGF’s lower valuation and content portfolio make it among the most attractive takeover stocks to buy at the moment.

Takeover Stocks: AMC Networks (AMCX)

Lions Gate isn’t the only potential target, however. AMC (NASDAQ:AMCX) is another mid-sized content provider that could provide an attractive consolation prize for acquirers who miss out on the big fish. It also provides a nice ‘tuck-in’ acquisition for companies looking to expand their reach.

AMC owns five networks, including the flagship AMC, along with WE tv, Sundance, BBC America and IFC. Ratings for The Walking Dead have declined of late, but it’s still the most-watched program on cable and it has a huge long tail of content licensing revenue ahead. (AMCX owns Dead in full, unlike Mad Men and Breaking Bad.)

Meanwhile, AMCX is controlled by the Dolan family, who has already sold off Cablevision and reportedly would like to do the same with MSG Networks (NYSE:MSGN). And of late, the company has aggressively repurchased shares instead of paying down debt, which suggests at least a possibility that management believes that debt could become someone else’s problem.

The only concern here is valuation. I sold AMCX on a recent runup near $70, while the stock looks cheap on a price-to-earnings basis, further declines from The Walking Dead can lead earnings south, and even 2018 growth looks relatively muted. With a recent pullback after a big run following the AT&T/Time Warner deal, however, AMCX is starting to drift back to an attractive valuation.

Takeover Stocks: BioMarin Pharmaceutical (BMRN)

Acquisition rumors have swirled around specialty biotech BioMarin Pharmaceutical (NASDAQ:BMRN) for years now. In fact, Genetic Engineering & Biotechnology News has had it on its takeover target list for six years now.

Analysts have become part of the act off and on as well, with speculated acquirers including Sanofi (NYSE:SNY) and Roche Holdings (OTCMKTS:RHHBY).

The M&A case here makes some sense. BioMarin has developed an attractive portfolio, including several “orphan drugs”, as well as potentially valuable gene therapy treatments for hemophilia. 2018 revenue should be in the range of $1.5 billion, but BioMarin continues to post losses, which is one reason why the stock has flat-lined the past few years.

A larger acquirer could add growth from BioMarin’s drugs and cut costs to turn the company profitable. The big concern is valuation, particularly after a 30% run off of April lows. Still, at some point, the long-awaited sale of BioMarin appears likely. And even just below $100, there’s still more upside to come in that scenario.

Takeover Stocks: Arconic (ARNC)

Aircraft parts manufacturer Arconic (NYSE:ARNC) has been a subject of takeover speculation ever since it split from Alcoa (NYSE:AA). An activist stake owned by Elliott Management, whose strategies generally center on a near-term sale, only added to the frenzy. CNBC’s Jim Cramer argued last year that Honeywell International (NYSE:HON) was the obvious buyer, after United Technologies (NYSE:UTX) agreed to acquire Rockwell Collins (NYSE:COL).

That speculation has been paused, however, as Arconic’s performance has hit the skids. The stock plunged in late April after cutting its full-year outlook. Higher aluminum costs are hitting margins (and somewhat ironically benefiting the Alcoa unit that supposedly was hiding Arconic’s true potential). Production missteps under Elliott’s new, hand-picked CEO have only added to the pressure.

Still, at some point, Arconic seems likely to return to being one of the most talked-about takeover stocks. It will take some time for the company to work through near-term issues. But with end demand from Boeing (NYSE:BA) strong and likely to stay the way, and consolidation in the space inevitable, Arconic very well may be acquired sooner than many investors currently believe.

Takeover Stocks: Xilinx (XLNX)

There are three key reasons why chipmaker Xilinx (NASDAQ:XLNX) is a likely acquisition target. The first is that the chip space in general is performing well and optimism toward the future is rising. With trends like IoT (Internet of Things) providing tailwinds, there’s an increasing belief that the old, more cyclical, nature of the space is starting to fade.

Secondly, Xilinx looks like a strong play on one of the bigger trends: artificial intelligence. Its FPGAs (Field Programmable Gate Arrays) are tailor-made for AI applications. Indeed, the company focused heavily on artificial intelligence during its Investor Day in May.

And, third, there’s a logical acquirer here in Broadcom (NASDAQ:AVGO). Even before Broadcom’s bid to buy Qualcomm (NASDAQ:QCOM) fell through, XLNX was touted as an attractive target for that always-acquisitive company. With Broadcom now U.S.-based, and with plenty of dry powder, such a deal makes even more sense at the moment. With XLNX lagging the chip space — it has gained less than 5% over the past year — despite strong earnings, the valuation looks workable as well.

Takeover Stocks: Maxim Integrated (MXIM)

Maxim Integrated (NASDAQ:MXIM) is another target for Broadcom or another large semiconductor company. Indeed, speculation has swirled for some time. Rumors of interest from Japan’s Renesas Electronics (OTCMKTS:RNECY) spiked MXIM stock in January, but the rumor was quickly shot down. Back in 2015, sources said Maxim held talks with Analog Devices (NASDAQ:ADI) and Texas Instruments (NASDAQ:TXN).

In both cases, price was a reported issue, and that still may be the case. At 21x forward earnings, MXIM stock isn’t exactly cheap. But a takeover at some point does seem possible, if not necessarily likely. And in the meantime, investors can receive a 2.8% dividend yield as they wait.

Takeover Stocks: Mattel (MAT)

Mattel (NASDAQ:MAT) is not a stock for the faint of heart. Execution missteps and weak demand have led MAT stock to drop by about 62% over the past five years, and 32% over the past three, even with a recent rally. The loss of a key licensing deal with Disney to rival Hasbro (NASDAQ:HAS) has only added to the pressure.

Indeed, I don’t see MAT as a buy, particularly after gains over the past couple of months. I argued a year ago that the stock was a value trap (when it traded above current levels) and I wasn’t particularly impressed with Q1 results.

But Mattel appears to have entered the realm of takeover stocks, and with some reason. Hasbro could be a suitor, although antitrust concerns are an issue. The company itself said it had rejected an offer from MGA Entertainment in May.

The huge amount of debt is a big problem, as markets are valuing that debt as low as 82 cents on the dollar, making it less likely that an acquirer would want to pay par and provide a premium to equity owners. Still, rumors continue to swirl, and if Mattel can make some progress on its turnaround, the calls for a sale likely will only get louder.

Takeover Stocks: Red Hat (RHT)

Red Hat (NYSE:RHT) is in an interesting spot at the moment. The open-source software developer unquestionably has a major growth driver in cloud computing. But it’s also coming off a disappointing Q1 earnings report that sent RHT stock plunging.

Even after the losses, RHT still isn’t cheap.

Yet takeover speculation has continued, with recent rumors suggesting Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) should be interested as it builds out its cloud business. Any interest could start a bidding war, with other tech giants including Microsoft (NASDAQ:MSFT) perhaps becoming interested.

Whether there’s room for more premium is unclear, with RHT still trading at a dear 34x+ forward P/E multiple. But given its growth potential and importance in such a key space, Red Hat could become a target at any time.

Earnings season is upon us again — and it’s a big one. The market has traded sideways for several months now, and a solid batch of earnings reports could be just the catalyst to move broad markets back to new all-time highs.

Of late, investors have alternated between optimism toward a strong U.S. economy and fears about higher interest rates and potential trade wars. Moving the headlines to what should be at worst a solid earnings season could be good news for U.S. equities.

After all, there’s still a lot to like. Lower tax rates will help the majority of reporting companies. The economy looks like it’s at — or getting very close to — full employment. The effect of inflation in areas like labor and commodities bears watching, and could pressure margins and profit growth. But overall it seems like the majority of earnings reports should be good news.

This week kicks off the season — led by several key financials. But leaders in both the consumer and industrial spaces should also signal the health of their respective sectors. Strong reports from these five companies could send their stocks higher and also give investors reason for confidence heading into the next few weeks.

5 Earnings Reports to Watch: PepsiCo (PEP)

Earnings Report Date: Tuesday, before market open

PepsiCo (NASDAQ:PEP) has had a roller-coaster 2018. As of late January, PEP stock traded at an all-time high. By early May, it reached a 29-month low. An ugly start to the year for consumer products stocks was a key culprit. Not even a solid Q1 report in April could stem the bleeding.

Pepsi stock has rallied into earnings, however, rising 14% from those May lows. It can keep the momentum going with another beat on Tuesday. But caution might be advised. CPG stocks have struggled this year — for good reason, as I wrote in May. The new Bubly line, meant to compete with LaCroix from National Beverage Corp. (NASDAQ:FIZZ), needs to be a win — and may not be. Declining soda consumption, particularly relative to diet varieties, presents another long-term headwind.

PEP has outperformed rival The Coca-Cola Co (NYSE:KO) for years now. It may still do so going forward. But given the pressures on the industry, that doesn’t necessarily mean PEP stock is going up … either on Tuesday or beyond.

5 Earnings Reports to Watch: Fastenal (FAST)

Earnings Report Date: Wednesday, before market open

One sector that has been notably weak this year has been construction. Distributor Fastenal Company (NASDAQ:FAST) could buoy the space with strong results on Wednesday morning.

After all, FAST sales are a key data point relative to demand from builders and contractors. As such, it’s possible that a good quarter for Fastenal could do as much — if not more — to help other stocks than its own. Strong revenue results will suggest confidence from Fastenal’s suppliers and a continuation of solid growth in the industry.

And with those suppliers not threatened by Amazon.com (NASDAQ:AMZN), investors might see less risk in them. FAST does trade at a seven-month low, so a good report can help its own stock. But investors across the sector will be watching closely as well.

5 Earnings Reports to Watch: J.P. Morgan Chase (JPM)

Earnings Report Date: Friday, before market open

After a huge post-election run, financials have weakened – and that includes J.P. Morgan Chase(NYSE:JPM). JPM actually trades at a seven-month low at the moment.

It’s difficult to see why. Fed rate hikes, which should help net interest margin for JPM and other banks, seem likely to be on the expected pace. Federal Reserve stress tests went well, leading Josh Enomoto to recommend JPM as one of three bank stocks to buy.

I agree with Enomoto; I recommended JPM myself back in March. I still like Bank of America (NYSE:BAC) best in this sector, but investors can’t go wrong with JPM, either. And a strong earnings report on Friday should remind investors why this is a stock worth owning long-term.

5 Earnings Reports to Watch: Wells Fargo (WFC)

Earnings Report Date: Friday, before market open

For Wells Fargo (NYSE:WFC), Friday’s Q2 release will be less about what the company is doing right – and more about what it’s doing better. Wells continues to struggle with its past scandals, with the Fed deciding back in February to cap its asset growth as a result.

Strong numbers will help the stock’s cause. But the quarter — and the earnings call — will be more about restoring investor confidence. Wells Fargo’s largely new management will try and make the case that the bank is headed in the right direction.

On that front, I’m still skeptical. Particularly with JPM and BAC on sale, there are simply easier ways to make money in the financial space. It will take quite a bit from Wells Fargo’s Q2 report to suggest that past failures truly are behind the company.

5 Earnings Reports to Watch: Citigroup (C)

Earnings Report Date: Friday, before market open

Citigroup (NYSE:C) similarly has taken a hit of late. The stock actually touched an 11-month low last month before a modest rebound. And the low price sets up a potentially interesting report of its own on Friday morning.

After all, C stock looks like the cheapest of the big banks. It still trades below book value and at barely 9x 2019 EPS estimates. A recently boosted capital return program will add to buybacks and move the stock’s dividend yield to nearly 2.7%.

But Citi has its own regulatory issues to worry about. It still feels much more like a turnaround play than JPM or BAC. It’s not executing as well as those peers in either consumer or investment banking.

That leaves room for upside if Citigroup can improve its operations. That’s what investors will be watching for on Friday — and if they like what they hear, C stock could become a near-term out-performer.

Source: Investor Place 

After a 14-month bull run, the stock market has seen a return in volatility of late — and a few big sell-offs. It’s clearly a more nervous market, and that means investors have to be more careful in choosing what stocks to buy.

That means sticking with quality stocks and avoiding those that can blow a hole in your portfolio. These 10 stocks all continue that level of risk.

In a bull market, in some cases those risks are worth taking. Ahead of what looks like a potentially dangerous second quarter, however, investors should steer clear of these 10 stocks.

Worst Stocks to Buy: Blue Apron (APRN)

Blue Apron Holdings Inc (NYSE:APRN) has been one of the worst IPOs in recent memory. At $2, APRN stock has lost 80% of its value from its IPO price in June. And bear in mind that the $10 price was well below the original range of $15-$17 per share.

All the way down, APRN has attracted buyers. The stock even posted a short-lived rally in December. But the fact remains that there’s basically no price where Blue Apron stock is cheap enough.

2018 numbers should be better in terms of both profitability and cash flow. But Blue Apron still expects to lose money even at the EBITDA line — and to burn cash. With debt coming due in August 2019, there’s a possibility that APRN could go to zero within eighteen months, as I argued last month.

Even if that worst-case scenario doesn’t play out, there’s little reason to chase APRN at these levels. Q1 results don’t look likely to be notably better, as the company still is working through the addition of a new distribution center in New Jersey. Competition is intense, with Walmart Inc(NYSE:WMT), Kroger Co (NYSE:KR) and even Weight Watchers International, Inc.(NYSE:WTW), among many others, entering the meal kit space.

$2-per-share might sound cheap, but APRN still is valued at nearly $400 million. And with a mid-term path toward zero, there’s no price cheap enough for Blue Apron stock.

Worst Stocks to Buy: Chipotle (CMG)

There is a case to buy Chipotle Mexican Grill, Inc. (NYSE:CMG) at these levels. The impact of the company’s food safety issues is receding. A new CEO has sparked optimism, as Luke Lango argued last month. The company expects positive same-restaurant sales in 2018, and new stores will add to revenue growth.

But I’m not buying CMG, particularly with a quick and steep rebound after a disappointing Q4 earnings report in February. A new CEO can help, but his impact isn’t going to be seen in Q1. The entire restaurant industry looks rather weak, particularly for operators like CMG as opposed to franchisors like McDonald’s Corporation (NYSE:MCD) and Yum! Brands, Inc. (NYSE:YUM).

And CMG already is pricing in quite a bit of turnaround. The stock trades at over 50x 2017 EPS and 38x 2018 consensus. Those are huge multiples for a still-struggling company in this kind of market. And after the past few quarters, I certainly wouldn’t enjoy being long CMG ahead of Q1 earnings this month.

Worst Stocks to Buy: Fossil (FOSL)

Fossil Group Inc (NASDAQ:FOSL) had one of the best first quarters in the entire market. A blowout Q4 report in February sent the stock up a stunning 88% in a single session.

But the optimism seen in February already has started to fade. FOSL stock has pulled back over 20% from post-earnings levels. And a short squeeze no doubt drove at least some of the gains: FOSL was the most heavily-shorted stock in the Russell 3000 ahead of earnings, according to Bloomberg.

There is some good news here. Strength in wearables led to the surprising Q4 results, as it offset weakness in traditional watches. FOSL stock still isn’t that expensive, trading at ~5x FY18 EV/EBITDA guidance and ~13x implied non-GAAP EPS.

Still, long-term challenges persist. Even with the strong Q4, full-year same-store sales still fell 6%. The optimism toward the wearables business may be premature. Apple Inc. (NASDAQ:AAPL) has had some success, but Fitbit Inc (NYSE:FIT) has struggled mightily.

Meanwhile, earnings multiples aren’t out of line for brick-and-mortar retail — and suggest a stabilization in profits. With Fossil still guiding for profits to decline in fiscal 2018, that seems premature. FOSL did squeeze the shorts, but lightning isn’t likely to strike twice in Q2.

Worst Stocks to Buy: Barrick Gold (ABX)

Heading into Q2, I can see the case for Barrick Gold Corp (USA) (NYSE:ABX). Barrick was the world’s largest gold producer in 2017. Gold has risen for three straight quarters, and could rise more in Q2. More market volatility, geopolitical tension, or any macro concerns could stoke demand for gold as a “safe haven”. Meanwhile, ABX is bouncing off a multi-year low, and looks cheap at under 17x forward EPS.

But that’s kind of the point. Barrick hasn’t benefited from the recent spike. Gold is up 16% since the beginning of 2017. ABX is down 22%. Gold has risen nearly 50% over the past decade; ABX has declined 72%.

That problem isn’t going to change in 2018. Barrick’s disappointing production guidance helped send Barrick stock to that multi-year low. Goldcorp Inc. (USA) (NYSE:GG) is likely to take Barrick’s crown as the top gold producer. Issues in Zambia and a settlement in Tanzania provide further pressure.

Gold indeed may rise again in Q2 — and ABX may follow. But given the long history here and the slow pace of Barrick’s turnaround make it a poor choice to play a higher gold thesis. Investors would be much better off buying GG, Newmont Mining Corp (NYSE:MEM) — or gold itself.

Worst Stocks to Buy: Deutsche Bank (DB)

The long-running turnaround at Deutsche Bank AG (ADR) (NYSE:DB) simply hasn’t taken. DB shares have bounced off a three-decade low reached in 2016. But a recent sell-off has pushed DB back below $14, with returns even from those lows barely over 20%. In the meantime, fellow investment banks like Goldman Sachs Group Inc (NYSE:GS) and Morgan Stanley (NYSE:MS) have soared.

The case for a long-term turnaround isn’t dead. There is some potential value in Deutsche Bank stock. But it’s highly unlikely investors will enjoy the next couple of months. The company already admitted that planned cost cuts would be delayed. Rumors are swirling around the future of CEO John Cryan — with reports suggesting multiple candidates already have turned the job down.

Deustche Bank looks like a mess, plain and simple. And with speculation likely to swirl throughout the quarter, and further hurt morale and the company’s competitive position, that mess isn’t getting fixed in the next three months.

Worst Stocks to Buy: Walt Disney Co (DIS)

The long-term case for Walt Disney Co (NYSE:DIS) remains up for debate. I remain skeptical toward DIS, largely due to the long-running (and very real) concerns surrounding the key ESPN unit.

The short-term case, however, looks outright bearish. Disney is trying to acquire assets from Twenty-First Century Fox Inc (NASDAQ:FOX, NASDAQ:FOXA) — a deal the market sees as necessary for Disney to build out its content empire. But Comcast Corporation(NASDAQ:CMCSA) is stepping in to bid for Sky PLC (ADR) (OTCMKTS:SKYAY), which Fox itself is trying to buy. And that deal potentially could wind up scuttling the entire Disney-Fox tie-up — or push Disney to up its bid.

There’s going to be a lot of speculation, and a lot of uncertainty, over Disney’s M&A over the next few months. And in this market, that’s probably not going to be a great thing for DIS stock. DIS already fell 6.6% in Q1, and between Fox and what looks like an accelerating trend toward cost-cutting, Q2 would be worse. There is value here, and the company’s new streaming service could drive growth in the future. But until then, and without a lower price, DIS looks likely to at best continue its range-bound trading of the last three years.

Worst Stocks to Buy: Under Armour (UA)

Under Armour Inc (NYSE:UAA, NYSE:UA) shareholders have received some good news of late. UAA stock has rallied 43% after hitting a four-year low in November.

But I continue to be skeptical about Under Armour’s prospects, even after a better Q4 result. And there’s a good chance that UAA could revisit the lows in the second quarter.

UAA stock remains dearly valued, at 57x-forward-earnings. Margin pressure continues. Analysts aren’t backing the stock, with the average target price of $14.28, 13% below the current price. Meanwhile, Nike Inc (NYSE:NKE) just posted a strong quarter and projected an inflection point in its North American business — the same business from which Under Armour is trying to take market share.

More broadly, UAA has teased investors before during its long decline from above $50 to under $12. The recent gains look like another head-fake that could reverse after the Q1 report a few weeks from now.

Worst Stocks to Buy: Box

As far as high-growth tech stocks go, Box Inc (NYSE:BOX) doesn’t look that out of line from a valuation standpoint. FY19 (ending January) guidance suggests a 5x EV/revenue multiple. With high-flyers like Workday Inc (NASDAQ:WDAY) and Shopify Inc (NYSE:SHOP), among many others, trading at 8x-10x or higher, Box’s valuation isn’t that onerous.

Still, there’s an awful lot of reason for caution. The recent IPO of Dropbox Inc. (NASDAQ:DBX) could potentially steal investor attention, even though Dropbox is far more consumer-focused than business-centric Box. Q4 earnings in early March sent BOX stock plummeting, but the stock quickly reversed.

BOX stock doesn’t necessarily look like a short — less than 4% of shares outstanding are sold short at the moment — but it does look potentially dangerous ahead entering into Q2. Growth is solid, but not particularly impressive, with guidance suggesting a ~20% increase in FY19. Box isn’t close to profitability. Dropbox could soak up some of the attention and investor enthusiasm for the business model. If the market heads further south, BOX would seem to be a likely loser.

Worst Stocks to Buy: tronc (TRNC)

Newspaper stocks like tronc Inc (NASDAQ:TRNC) actually haven’t done that badly of late. Certainly, they’ve performed better than investors might think given the clear secular pressure on print sales, and the difficulty in monetizing content.

Indeed, TRNC has gained 14% over the last year. Gannett Co Inc (NYSE:GCI) has risen 21%, plus 6% in dividends; New Media Investment Group Inc (NYSE:NEWM) has risen the same amount, with an even larger dividend.

But the gains in the sector seem likely to reverse — and TRNC might be most at risk. Here, too, Q4 earnings disappointed badly. Chairman Michael Ferro recently retired ahead of sexual harassment allegations. The sale of the Los Angeles Times brought in much-needed cash, but profits continue to decline even with tronc spending on additional acquisitions.

There is a case that newspaper companies can be classic “cigar butt” stocks, generating enough cash flow to make even a declining business worth buying. But tronc’s lack of shareholder returns undercuts that case, as does the loss of Ferro, who had driven the company’s strategy. TRNC has performed well of late, but its run may be coming to an end.

Worst Stocks to Buy: General Mills (GIS)

Some investors no doubt are going to take a chance on General Mills, Inc. (NYSE:GIS) after the company’s post-earnings plunge last month. GIS trades at a five-year low. It yields 4.3%. It’s a 90-year-old company with well-known brands and a long, profitable history. From a distance, General Mills stock at $45 might look like an opportunity.

However, I don’t think that’s the case, and I think it’s highly likely it gets worse for GIS before it gets better. I wrote after fiscal first-quarter earnings back in September that General Mills had lost investor trust when it came to both revenue and margins. Two quarters later, those problems are only more pressing — and General Mills has proven that it has little in the way of answers.

In a somewhat odd way, GIS is reminiscent of General Electric Company (NYSE:GE). In both cases, bulls focused on the history and the dividend, while glossing over near-term problems and reasonably significant debt levels.

I’m not sure GIS’ trend will be quite as bad as that of GE, which has lost half of its value in less than two years, or that a General Mills dividend cut is on the way. But the case of GE, the underlying problems in the business led to a long, slow decline as investors adjusted to the new reality. That’s a very real risk that a similar process will play out at GIS over the next few months.

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Source: Investors Alley