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.
Separating the winners from the value traps is a tough challenge, and that’s where StockStory comes in. Our job is to find you high-quality companies that will stand the test of time. Keeping that in mind, here is one value stock with strong fundamentals and two climbing an uphill battle.
Two Value Stocks to Sell:
Spectrum Brands (SPB)
Forward P/E Ratio: 10.6x
A leader in multiple consumer product categories, Spectrum Brands (NYSE: SPB) is a diversified company with a portfolio of trusted brands spanning home appliances, garden care, personal care, and pet care.
Why Should You Sell SPB?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Projected sales decline of 4.9% over the next 12 months indicates demand will continue deteriorating
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
Spectrum Brands is trading at $56.12 per share, or 10.6x forward P/E. Read our free research report to see why you should think twice about including SPB in your portfolio.
Sabre (SABR)
Forward P/E Ratio: 16x
Originally a division of American Airlines, Sabre (NASDAQ: SABR) is a technology provider for the global travel and tourism industry.
Why Do We Pass on SABR?
- Number of central reservation system transactions has disappointed over the past two years, indicating weak demand for its offerings
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
Sabre’s stock price of $2.99 implies a valuation ratio of 16x forward P/E. To fully understand why you should be careful with SABR, check out our full research report (it’s free).
One Value Stock to Watch:
Centene (CNC)
Forward P/E Ratio: 7.3x
Serving nearly 1 in 15 Americans through its government healthcare programs, Centene (NYSE: CNC) is a healthcare company that manages government-sponsored health insurance programs like Medicaid and Medicare for low-income and complex-needs populations.
Why Do We Like CNC?
- Annual revenue growth of 15.5% over the last five years beat the sector average and underscores the unique value of its offerings
- Enormous revenue base of $169.3 billion gives it leverage over plan holders and advantageous reimbursement terms with healthcare providers
- Earnings per share grew by 14.8% annually over the last five years, massively outpacing its peers
At $55.83 per share, Centene trades at 7.3x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
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 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.
