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.
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. Keeping that in mind, here are three value stocks climbing an uphill battle and some other investments you should look into instead.
MGP Ingredients (MGPI)
Forward P/E Ratio: 11.3x
Headquartered in Atchison, Kansas, MGP Ingredients (NASDAQ: MGPI) is a leading supplier of high-quality ingredients to the food and beverage industry
Why Should You Dump MGPI?
- Annual sales declines of 2.8% for the past three years show its products struggled to connect with the market
- Projected sales decline of 19.8% over the next 12 months indicates demand will continue deteriorating
- Operating margin declined by 10 percentage points over the last year as its sales cratered
MGP Ingredients’s stock price of $30.72 implies a valuation ratio of 11.3x forward P/E. Read our free research report to see why you should think twice about including MGPI in your portfolio.
AMC Networks (AMCX)
Forward P/E Ratio: 2.2x
Originally the joint-venture of four cable television companies, AMC Networks (NASDAQ: AMCX) is a broadcaster producing a diverse range of television shows and movies.
Why Is AMCX Risky?
- Products and services aren't resonating with the market as its revenue declined by 4.6% annually over the last five years
- Sales were less profitable over the last five years as its earnings per share fell by 16.4% annually, worse than its revenue declines
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
At $6.57 per share, AMC Networks trades at 2.2x forward P/E. If you’re considering AMCX for your portfolio, see our FREE research report to learn more.
ABM (ABM)
Forward P/E Ratio: 13.6x
With roots dating back to 1909 as a window washing company, ABM Industries (NYSE: ABM) provides integrated facility management, infrastructure, and mobility solutions across various sectors including commercial, manufacturing, education, and aviation.
Why Do We Avoid ABM?
- 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
- Performance over the past two years shows its incremental sales were less profitable as its earnings per share were flat
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 7.9 percentage points
ABM is trading at $52.12 per share, or 13.6x forward P/E. To fully understand why you should be careful with ABM, check out our full research report (it’s free).
High-Quality Stocks for All Market Conditions
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market 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.
