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The past year hasn't been kind to the stocks featured in this article. Each has tumbled to their lowest points in 12 months, leaving investors to decide whether they're witnessing fire sales or falling knives.

While market timing can be an extremely profitable strategy, it has burned many investors and requires rigorous analysis - something we specialize in at StockStory. That said, here are three stocks where the skepticism is well-placed and some better opportunities to consider.

United Parcel Service (UPS)

One-Month Return: -2.7%

Trademarking its recognizable UPS Brown color, UPS (NYSE:UPS) offers package delivery, supply chain management, and freight forwarding services.

Why Should You Dump UPS?

1. Declining unit sales over the past two years indicate demand is soft and that the company may need to revise its strategy

2. Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable

3. Eroding returns on capital suggest its historical profit centers are aging

United Parcel Service is trading at $96.95 per share, or 12.7x forward P/E. To fully understand why you should be careful with UPS, check out our full research report (it’s free).

Werner (WERN)

One-Month Return: -7.2%

Conducting business in over a 100 countries, Werner (NASDAQ:WERN) offers full-truckload, less-than-truckload, and intermodal delivery services.

Why Are We Out on WERN?

1. Sales tumbled by 5.9% annually over the last two years, showing market trends are working against its favor during this cycle

2. Earnings per share fell by 34.3% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable

3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

At $26.71 per share, Werner trades at 21.9x forward P/E. Read our free research report to see why you should think twice about including WERN in your portfolio, it’s free.

LGI Homes (LGIH)

One-Month Return: -8.7%

Based in Texas, LGI Homes (NASDAQ:LGIH) is a homebuilding company specializing in constructing affordable, entry-level single-family homes in desirable communities across the United States.

Why Do We Think LGIH Will Underperform?

1. Average backlog growth of 4.9% over the past two years was mediocre and suggests fewer customers signed long-term contracts

2. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution