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.
This distinction between true value and value traps can challenge even the most skilled investors. Luckily for you, we started StockStory to help you uncover exceptional companies. That said, here are three value stocks with little support and some other investments you should consider instead.
Sensata Technologies (ST)
Forward P/E Ratio: 9.1x
Originally a temperature sensor control maker and a subsidiary of Texas Instruments for 60 years, Sensata Technology Holdings (NYSE: ST) is a leading supplier of analog sensors used in industrial and transportation applications, best known for its dominant position in the tire pressure monitoring systems in cars.
Why Do We Pass on ST?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 4.3% annually over the last two years
- Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
- Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 13 percentage points
At $31 per share, Sensata Technologies trades at 9.1x forward P/E. To fully understand why you should be careful with ST, check out our full research report (it’s free).
Ryder (R)
Forward P/E Ratio: 13.3x
As one of the first companies to introduce the idea of leasing trucks, Ryder (NYSE: R) provides rental vehicles to businesses and delivers packages directly to homes or businesses.
Why Should You Sell R?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 3% for the last two years
- Earnings per share have contracted by 7.4% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- Free cash flow margin dropped by 9.5 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Ryder’s stock price of $187.45 implies a valuation ratio of 13.3x forward P/E. Read our free research report to see why you should think twice about including R in your portfolio.
Haemonetics (HAE)
Forward P/E Ratio: 10.4x
With roots dating back to 1971 and a mission to improve blood-related healthcare, Haemonetics (NYSE: HAE) provides specialized medical devices and software for blood collection, processing, and management across plasma centers, blood banks, and hospitals.
Why Are We Wary of HAE?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Revenue base of $1.35 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Sales are projected to tank by 2.9% over the next 12 months as demand evaporates
Haemonetics is trading at $52.20 per share, or 10.4x forward P/E. If you’re considering HAE for your portfolio, see our FREE research report to learn more.
Stocks We Like More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our 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 Exlservice (+354% 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
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
