Value investing has created more billionaires than any other strategy, like Warren Buffett, who built his fortune by purchasing wonderful businesses at reasonable prices. But these hidden gems are few and far between - many stocks that appear cheap often stay that way because they face structural issues.
Separating the winners from the value traps is a tough challenge, and that’s where StockStory comes in. Our job is to find you high-quality companies that will stand the test of time. Keeping that in mind, here are three value stocks with little support and some other investments you should consider instead.
Array (ARRY)
Forward P/E Ratio: 11x
Going public in October 2020, Array (NASDAQ: ARRY) is a global manufacturer of ground-mounting tracking systems for utility and distributed generation solar energy projects.
Why Do We Avoid ARRY?
- Flat unit sales over the past two years suggest it might have to lower prices to accelerate growth
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
Array’s stock price of $7.11 implies a valuation ratio of 11x forward P/E. Read our free research report to see why you should think twice about including ARRY in your portfolio.
Labcorp (LH)
Forward P/E Ratio: 14.8x
With over 600 million tests performed annually and involvement in 90% of FDA-approved drugs in 2023, Labcorp (NYSE: LH) provides laboratory testing services and drug development solutions to doctors, hospitals, pharmaceutical companies, and patients worldwide.
Why Does LH Worry Us?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Day-to-day expenses have swelled relative to revenue over the last five years as its adjusted operating margin fell by 13.3 percentage points
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $243.72 per share, Labcorp trades at 14.8x forward P/E. Check out our free in-depth research report to learn more about why LH doesn’t pass our bar.
Valley National Bank (VLY)
Forward P/B Ratio: 0.7x
Tracing its roots back to 1927 during the economic boom before the Great Depression, Valley National Bancorp (NASDAQGS:VLY) operates Valley National Bank, providing commercial, consumer, and wealth management banking services across several states.
Why Are We Hesitant About VLY?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 3% annually over the last two years
- Expenses have increased as a percentage of revenue over the last four years as its efficiency ratio degraded by 9.9 percentage points
- Earnings per share fell by 6.6% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
Valley National Bank is trading at $9.50 per share, or 0.7x forward P/B. If you’re considering VLY for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2024, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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