Rock-bottom prices don't always mean rock-bottom businesses. The stocks we're examining today have all touched their 52-week lows, creating a classic investor's dilemma: bargain opportunity or value trap?

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.

Reynolds (REYN)

One-Month Return: +1.4%

Best known for its aluminum foil, Reynolds (NASDAQ:REYN) is a household products company whose products focus on food storage, cooking, and waste.

Why Do We Pass on REYN?

1. Declining unit sales over the past two years show it’s struggled to move its products and had to rely on price increases

2. Projected sales decline of 1.4% for the next 12 months points to an even tougher demand environment ahead

3. Free cash flow margin dropped by 6.1 percentage points over the last year, implying the company became more capital intensive as competition picked up

Reynolds’s stock price of $23.31 implies a valuation ratio of 14.2x forward P/E. Dive into our free research report to see why there are better opportunities than REYN .

Universal Logistics (ULH)

One-Month Return: -4.6%

Founded in 1932, Universal Logistics (NASDAQ:ULH) is a provider of customized transportation and logistics solutions operating throughout the United States and in Mexico, Canada, and Colombia.

Why Do We Think ULH Will Underperform?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 5.1% annually over the last two years

2. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term

3. Free cash flow margin shrank by 9.6 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

Universal Logistics is trading at $23.41 per share, or 7.4x forward P/E. Check out our free in-depth research report to learn more about why ULH doesn’t pass our bar .

Maximus (MMS)

One-Month Return: -1.2%

With nearly 50 years of experience translating public policy into operational programs that serve millions of citizens, Maximus (NYSE:MMS) provides operational services, clinical assessments, and technology solutions to government agencies in the U.S. and internationally.

Why Are We Cautious About MMS?

1. Demand will likely fall over the next 12 months as Wall Street expects flat revenue

2. Underwhelming 12.3% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its shrinking returns suggest its past profit sources are losing steam

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