Value stocks typically trade at discounts to the broader market, offering patient investors the opportunity to buy businesses when they’re out of favor. The key risk, however, is that these stocks are usually cheap for a reason – five cents for a piece of fruit may seem like a great deal until you find out it’s rotten.
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 climbing an uphill battle.
Two Value Stocks to Sell:
LiveRamp (RAMP)
Forward P/S Ratio: 2.7x
Started in 2011 as a spin-out of RapLeaf, LiveRamp (NYSE: RAMP) is a software-as-a-service provider that helps companies better target their marketing by merging offline and online data about their customers.
Why Are We Wary of RAMP?
- 12.1% annual revenue growth over the last three years was slower than its software peers
- Estimated sales growth of 8.4% for the next 12 months implies demand will slow from its three-year trend
- Free cash flow margin is forecasted to shrink by 4.4 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors
LiveRamp is trading at $32.62 per share, or 2.7x forward price-to-sales. Dive into our free research report to see why there are better opportunities than RAMP.
Marriott Vacations (VAC)
Forward P/E Ratio: 12.4x
Spun off from Marriott International in 1984, Marriott Vacations (NYSE: VAC) is a vacation company providing leisure experiences for travelers around the world.
Why Do We Think VAC Will Underperform?
- Demand for its offerings was relatively low as its number of conducted tours has underwhelmed
- Underwhelming 5.1% return on capital reflects management’s difficulties in finding profitable growth opportunities
- 7× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
At $83.86 per share, Marriott Vacations trades at 12.4x forward P/E. If you’re considering VAC for your portfolio, see our FREE research report to learn more.
One Value Stock to Buy:
UnitedHealth (UNH)
Forward P/E Ratio: 9.7x
With over 100 million people served across its various businesses and a workforce of more than 400,000, UnitedHealth Group (NYSE: UNH) operates a health insurance business and Optum, a healthcare services division that provides everything from pharmacy benefits to primary care.
Why Should You Buy UNH?
- Unparalleled scale of $410.1 billion in revenue enables it to spread administrative costs across a larger membership base
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- ROIC punches in at 21.6%, illustrating management’s expertise in identifying profitable investments
UnitedHealth’s stock price of $300.19 implies a valuation ratio of 9.7x forward P/E. 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 5 Strong Momentum 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 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
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