As the stock market climbs to new highs, it becomes psychologically harder for investors to keep buying. Each purchase feels riskier when the price chart looks like it’s already at a peak. But long-term wealth building, whether for retirement, family legacies, or charitable foundations, requires consistency. Sitting in cash is not a winning strategy. Markets may pull back in the short term, but over decades, history shows that steady investors are rewarded. That’s why it’s important not to take your foot off the gas.
With this in mind, here are 10 companies whose shares are currently out of favor. Whether because of industry headwinds, company-specific challenges, or broader market rotation, these businesses may offer opportunities for patient investors today.
Stanley Black & Decker (SWK)
Stanley Black & Decker is one of the world’s leading tool and storage companies, best known for its DeWalt, Craftsman, and Stanley brands. Over the past few years, the stock has lagged as the company has struggled with elevated inventories, soft demand in DIY channels, and margin pressure from inflation in materials and logistics. Management has responded with restructuring initiatives aimed at reducing costs, improving supply chain efficiency, and refocusing on its core tools and outdoor business. While short-term earnings remain under pressure, the company’s iconic brands and dominant market share provide a foundation for recovery, making today’s discounted valuation potentially attractive for patient, long-term investors.
V.F. Corporation (VFC)
The apparel company behind brands like The North Face, Vans, and Timberland has struggled with sluggish consumer spending and brand-specific issues at Vans. Margin compression and higher debt have also weighed on sentiment. Yet VFC owns a portfolio of iconic brands with global recognition, making its current valuation an interesting entry point for investors willing to look beyond near-term retail weakness.
Scotts Miracle-Gro (SMG)
Best known for lawn and garden products, Scotts also has exposure to hydroponics and cannabis cultivation supplies. That diversification hasn’t always been smooth—declines in the hydroponics segment have hurt results. However, consumer lawn and garden demand remains steady, and if the hydroponics industry stabilizes, SMG could regain momentum.
AES Corporation (AES)
AES is a global power company focused on renewable and conventional generation. While the long-term story is about decarbonization, recent challenges include higher project costs, delayed renewable rollouts, and pressure from interest rates on capital-intensive projects. For investors seeking exposure to the energy transition at a discount, AES offers a compelling, though cyclical, entry point.
Magna International (MG)
The Canadian auto-parts giant supplies manufacturers worldwide, including major EV makers. Supply chain constraints, labor disruptions, and slower EV adoption have weighed on results. Still, Magna is well-positioned for the future of mobility, and its global manufacturing footprint gives it resilience as industry conditions improve.
Avery Dennison (AVY)
Avery Dennison is a leader in labeling and packaging materials. Demand has softened as consumer goods companies reduce inventories, creating near-term earnings pressure. Longer term, Avery benefits from consistent demand for labeling, and its scale provides a competitive moat. The current slowdown may present an attractive buying opportunity.
Merck & Co. (MRK)
Despite being one of the strongest pharmaceutical companies in the world, Merck shares have cooled as investors worry about the eventual patent cliff for its blockbuster cancer drug Keytruda. Yet Merck has a rich pipeline and significant cash flow to invest in new therapies. For investors with a long horizon, the stock offers stability, income, and the potential for continued innovation.
Becton Dickinson (BDX)
This global medical technology company provides products for diagnostics, medication management, and surgical procedures. Shares have lagged due to slowing COVID-related demand and margin pressures. However, BD’s core business in medical devices remains essential to healthcare systems worldwide, making its current valuation appealing for steady compounders.
Otis Worldwide (OTIS)
The elevator and escalator leader faces near-term pressure from slowing construction activity in China and foreign exchange headwinds. Still, Otis benefits from a large installed base, generating recurring revenue through maintenance contracts. For investors seeking a durable business model tied to global urbanization, the current dip could be an opportunity.
Mondelez International (MDLZ)
The snack and confectionery giant behind Oreo, Cadbury, and Trident has seen its stock cool as consumers trade down in a tighter spending environment. Input cost inflation has also been a challenge. But Mondelez has pricing power and global scale, making it well-positioned for consistent long-term growth in snacking, one of the stickiest consumer categories.
