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.

At StockStory, we dig beneath the surface of price movements to uncover whether a company's fundamentals justify its current valuation or suggest hidden potential. Keeping that in mind, here are three stocks facing legitimate challenges and some alternatives worth exploring instead.

G-III (GIII)

One-Month Return: -10.7%

Founded as a small leather goods business, G-III (NASDAQ:GIII) is a fashion and apparel conglomerate with a diverse portfolio of brands.

Why Do We Avoid GIII?

1. Flat sales over the last two years suggest it must innovate and find new ways to grow

2. Forecasted revenue decline of 2.4% for the upcoming 12 months implies demand will fall off a cliff

3. ROIC of 7.8% reflects management’s challenges in identifying attractive investment opportunities

G-III’s stock price of $24.16 implies a valuation ratio of 6x forward price-to-earnings. Read our free research report to see why you should think twice about including GIII in your portfolio, it’s free .

Littelfuse (LFUS)

One-Month Return: -28.5%

The developer of the first blade-type automotive fuse, Littelfuse (NASDAQ:LFUS) provides electrical protection and control components for the automotive, industrial, electronics, and telecommunications industries.

Why Are We Out on LFUS?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 6.6% annually over the last two years

2. Sales were less profitable over the last two years as its earnings per share fell by 29% annually, worse than its revenue declines

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

At $153.66 per share, Littelfuse trades at 15.3x forward price-to-earnings. Check out our free in-depth research report to learn more about why LFUS doesn’t pass our bar .

Itron (ITRI)

One-Month Return: -7.1%

Founded by a small group of engineers who wanted to build a more efficient way to read utility meters, Itron (NASDAQ:ITRI) offers energy and water management products for the utility industry, municipalities, and industrial customers.

Why Are We Cautious About ITRI?

1. Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last five years

2. Estimated sales growth of 1.2% for the next 12 months implies demand will slow from its two-year trend

3. Underwhelming 3.2% return on capital reflects management’s difficulties in finding profitable growth opportunities