Wall Street has issued downbeat forecasts for the stocks in this article. These predictions are rare - financial institutions typically hesitate to say bad things about a company because it can jeopardize their other revenue-generating business lines like 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 is one stock where you should be greedy instead of fearful and two where the outlook is warranted.

Two Stocks to Sell:

CNA Financial (CNA)

Consensus Price Target: $42 (-1.5% implied return)

With roots dating back to 1853 and majority ownership by Loews Corporation, CNA Financial (NYSE: CNA) is a commercial property and casualty insurance provider offering coverage for businesses, including professional liability, surety bonds, and specialized risk management services.

Why Do We Pass on CNA?

1. Scale presents growth limitations compared to smaller competitors, evidenced by its below-average 6.5% annualized growth in net premiums earned for the last two years
2. Earnings per share fell by 1% annually over the last two years while its revenue grew, showing its incremental sales were much less profitable
3. Book value per share tumbled by 2% annually over the last five years, showing insurance sector trends are working against its favor during this cycle

CNA Financial’s stock price of $42.64 implies a valuation ratio of 0.8x forward price-to-sales. To fully understand why you should be careful with CNA, check out our full research report (it’s free).

Ellington Financial (EFC)

Consensus Price Target: $14.69 (9.4% implied return)

Operating under the guidance of Ellington Management Group, a respected name in structured credit markets, Ellington Financial (NYSE: EFC) acquires and manages a diverse portfolio of mortgage-related, consumer-related, and other financial assets to generate returns for investors.

Why Do We Think EFC Will Underperform?

1. Performance over the past five years shows its incremental sales were less profitable, as its 4.8% annual earnings per share growth trailed its revenue gains
2. Products and services are facing significant credit quality challenges during this cycle as tangible book value per share has declined by 5.7% annually over the last five years
3. Underwhelming 6.9% return on equity reflects management’s difficulties in finding profitable growth opportunities

Ellington Financial is trading at $13.43 per share, or 1x forward P/B. If you’re considering EFC for your portfolio, see our FREE research report to learn more.

One Stock to Watch:

Travelers (TRV)

Consensus Price Target: $313.74 (6.4% implied return)

Tracing its roots back to 1853 when it insured travelers against accidents on steamboats and railroads, Travelers (NYSE: TRV) provides a wide range of commercial and personal property and casualty insurance products to businesses, government units, associations, and individuals.

Why Does TRV Stand Out?

1. Pre-tax profit margin improvement of 10.5 percentage points over the last two years demonstrates its ability to scale efficiently
2. Share repurchases over the last two years enabled its annual earnings per share growth of 56.3% to outpace its revenue gains
3. Projected book value per share growth of 22% for the next 12 months is above its two-year trend, pointing to accelerating profitability

At $294.96 per share, Travelers trades at 1.8x forward P/B. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.

High-Quality Stocks for All Market Conditions

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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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.