The low valuation multiples for value stocks provide a margin of safety that growth stocks rarely offer. However, the challenge lies in determining whether these cheap assets are genuinely undervalued or simply on sale due to their potentially deteriorating business models.
Identifying genuine bargains from value traps is something many investors struggle with, which is why we started StockStory - to help you find the best companies. That said, here is one value stock with strong fundamentals and two with little support.
Two Value Stocks to Sell:
Leggett & Platt (LEG)
Forward P/E Ratio: 9x
Founded in 1883, Leggett & Platt (NYSE:LEG) is a diversified manufacturer of products and components for various industries.
Why Should You Dump LEG?
- Products and services aren't resonating with the market as its revenue declined by 1.5% annually over the last five years
- Sales were less profitable over the last five years as its earnings per share fell by 16.1% annually, worse than its revenue declines
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
Leggett & Platt is trading at $9.93 per share, or 9x forward P/E. Dive into our free research report to see why there are better opportunities than LEG.
Biogen (BIIB)
Forward P/E Ratio: 8.3x
Founded in 1978 and pioneering treatments for some of medicine's most complex challenges, Biogen (NASDAQ:BIIB) develops and markets therapies for neurological conditions, including multiple sclerosis, Alzheimer's disease, spinal muscular atrophy, and rare diseases.
Why Does BIIB Give Us Pause?
- Sales tumbled by 7.4% annually over the last five years, showing market trends are working against its favor during this cycle
- Forecasted revenue decline of 6.9% for the upcoming 12 months implies demand will fall even further
- Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 15.1% annually, worse than its revenue
At $132 per share, Biogen trades at 8.3x forward P/E. If you’re considering BIIB for your portfolio, see our FREE research report to learn more.
One Value Stock to Watch:
Thermon (THR)
Forward P/E Ratio: 14.2x
Creating the first packaged tracing systems, Thermon (NYSE:THR) is a leading provider of engineered industrial process heating solutions for process industries.
Why Are We Fans of THR?
- Offerings are difficult to replicate at scale and result in a premier gross margin of 42.8%
- Operating margin expanded by 11.6 percentage points over the last five years as it scaled and became more efficient
- Performance over the past five years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 20.9% outpaced its revenue gains
Thermon’s stock price of $28.94 implies a valuation ratio of 14.2x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. 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 Kadant (+351% 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