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 is one value stock trading at a big discount to its intrinsic value and two with little support.
Two Value Stocks to Sell:
GoPro (GPRO)
Forward P/E Ratio: 13.3x
Known for sponsoring extreme athletes, GoPro (NASDAQ: GPRO) is a camera company known for its POV videos and editing software.
Why Do We Pass on GPRO?
- Products and services have few die-hard fans as sales have declined by 6.1% annually over the last five years
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
GoPro’s stock price of $0.85 implies a valuation ratio of 13.3x forward P/E. If you’re considering GPRO for your portfolio, see our FREE research report to learn more.
Brown-Forman (BF.B)
Forward P/E Ratio: 13.7x
Best known for its Jack Daniel’s whiskey, Brown-Forman (NYSE: BF.B) is an alcoholic beverage company with a broad portfolio of brands in wines and spirits.
Why Are We Cautious About BF.B?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Forecasted revenue decline of 2.9% for the upcoming 12 months implies demand will fall off a cliff
- Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 6 percentage points
Brown-Forman is trading at $26.56 per share, or 13.7x forward P/E. To fully understand why you should be careful with BF.B, check out our full research report (it’s free).
One Value Stock to Buy:
Customers Bancorp (CUBI)
Forward P/B Ratio: 0.9x
Originally founded with a "high-tech, high-touch" branch-light banking strategy, Customers Bancorp (NYSE: CUBI) is a bank holding company that provides commercial and consumer banking services through its Customers Bank subsidiary, with a focus on business lending and digital banking.
Why Will CUBI Beat the Market?
- Annual net interest income growth of 9.8% over the last four years beat the sector average and underscores the value of its loans
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 21.9% over the last five years outstripped its revenue performance
- Balance sheet strength has increased this cycle as its 18.7% annual tangible book value per share growth over the last five years was exceptional
At $53.91 per share, Customers Bancorp trades at 0.9x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 6 Stocks for this week. 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-micro-cap company Tecnoglass (+1,754% 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
