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 are three value stocks with little support and some other investments you should consider instead.
Wix (WIX)
Forward P/S Ratio: 2.5x
Powering over 263 million registered users worldwide with its AI-driven tools, Wix (NASDAQ: WIX) provides a cloud-based platform that helps individuals and businesses create and manage professional websites without requiring coding skills.
Why Are We Hesitant About WIX?
- Average billings growth of 13.7% over the last year was subpar, suggesting it struggled to push its software and might have to lower prices to stimulate demand
- Operating margin improvement of 1.9 percentage points over the last year demonstrates its ability to scale efficiently
- Free cash flow margin is forecasted to shrink by 2.8 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors
Wix’s stock price of $100.75 implies a valuation ratio of 2.5x forward price-to-sales. Dive into our free research report to see why there are better opportunities than WIX.
Accel Entertainment (ACEL)
Forward P/E Ratio: 10.6x
Established in Illinois, Accel Entertainment (NYSE: ACEL) is a provider of electronic gaming machines and interactive amusement terminals to bars and entertainment venues.
Why Should You Sell ACEL?
- Sluggish trends in its video gaming terminals sold suggest customers aren’t adopting its solutions as quickly as the company hoped
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 4.8% for the last two years
- ROIC hasn’t moved, making investors question whether its recent investments can increase profitability
Accel Entertainment is trading at $10.36 per share, or 10.6x forward P/E. To fully understand why you should be careful with ACEL, check out our full research report (it’s free for active Edge members).
Capital Southwest (CSWC)
Forward P/E Ratio: 9.7x
Originally founded in 1961 as a venture capital investor that helped launch Texas Instruments, Capital Southwest (NASDAQ: CSWC) is a business development company that provides debt and equity financing to middle-market companies primarily in the United States.
Why Are We Cautious About CSWC?
- Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 5.5% annually
At $22.18 per share, Capital Southwest trades at 9.7x forward P/E. Check out our free in-depth research report to learn more about why CSWC doesn’t pass our bar.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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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