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.

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 climbing an uphill battle and some other investments you should look into instead.

Sanmina (SANM)

Forward P/E Ratio: 15.2x

Founded in 1980, Sanmina (NASDAQ: SANM) is an electronics manufacturing services company offering end-to-end solutions for various industries.

Why Should You Dump SANM?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 6.2% annually over the last two years
2. Gross margin of 8.2% is below its competitors, leaving less money to invest in areas like marketing and R&D
3. Earnings per share have dipped by 4.2% annually over the past two years, which is concerning because stock prices follow EPS over the long term

Sanmina is trading at $102.34 per share, or 15.2x forward P/E. If you’re considering SANM for your portfolio, see our FREE research report to learn more.

Enphase (ENPH)

Forward P/E Ratio: 12.7x

The first company to successfully commercialize the solar micro-inverter, Enphase (NASDAQ: ENPH) manufactures software-driven home energy products.

Why Does ENPH Give Us Pause?

1. Declining unit sales over the past two years indicate demand is soft and that the company may need to revise its strategy
2. Costs have risen faster than its revenue over the last five years, causing its operating margin to decline by 13.6 percentage points
3. Earnings per share have contracted by 27.9% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance

At $42.55 per share, Enphase trades at 12.7x forward P/E. Dive into our free research report to see why there are better opportunities than ENPH.

Everest Group (EG)

Forward P/B Ratio: 0.9x

Rebranded from Everest Re in 2023 to reflect its evolution beyond just reinsurance, Everest Group (NYSE: EG) underwrites property and casualty reinsurance and insurance worldwide, serving insurance companies, corporations, and other clients across six continents.

Why Does EG Fall Short?

1. Estimated sales growth of 2.3% for the next 12 months implies demand will slow from its two-year trend
2. Incremental sales over the last five years were much less profitable as its earnings per share fell by 24.1% annually while its revenue grew
3. Estimated book value per share decline for the next 12 months implies a challenging profitability environment

Everest Group’s stock price of $337.48 implies a valuation ratio of 0.9x forward P/B. Check out our free in-depth research report to learn more about why EG doesn’t pass our bar.

High-Quality Stocks for All Market Conditions

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 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.