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 is one value stock with strong fundamentals and two climbing an uphill battle.
Two Value Stocks to Sell:
Coty (COTY)
Forward P/E Ratio: 7.2x
With a portfolio boasting many household brands, Coty (NYSE: COTY) is a beauty products powerhouse spanning cosmetics, fragrances, and skincare.
Why Is COTY Risky?
- Absence of organic revenue growth over the past one years suggests it may have to lean into acquisitions to drive its expansion
- Demand is forecasted to shrink as its estimated sales for the next 12 months are flat
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Coty is trading at $3.81 per share, or 7.2x forward P/E. Read our free research report to see why you should think twice about including COTY in your portfolio.
Delta (DAL)
Forward P/E Ratio: 10.3x
One of the ‘Big Four’ airlines in the US, Delta Air Lines (NYSE: DAL) is a major global air carrier that serves both business and leisure travelers through its domestic and international flights.
Why Are We Out on DAL?
- Performance surrounding its revenue passenger miles has lagged its peers
- Estimated sales growth of 2.1% for the next 12 months implies demand will slow from its two-year trend
- Low returns on capital reflect management’s struggle to allocate funds effectively
Delta’s stock price of $61.25 implies a valuation ratio of 10.3x forward P/E. Dive into our free research report to see why there are better opportunities than DAL.
One Value Stock to Buy:
F&G Annuities & Life (FG)
Forward P/B Ratio: 1x
Founded in 1959 and serving approximately 677,000 policyholders who rely on its financial protection products, F&G Annuities & Life (NYSE: FG) provides fixed annuities, life insurance, and pension risk transfer solutions to retail and institutional clients.
Why Is FG a Good Business?
- Net premiums earned surged by 19.7% annually over the past two years, reflecting strong market share gains this cycle
- Annual book value per share growth of 28.2% over the past two years was outstanding, reflecting strong capital accumulation this cycle
- Capital generation for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust book value per share growth of 50.3%
At $34.72 per share, F&G Annuities & Life trades at 1x forward P/B. Is now a good time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out 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-micro-cap company Kadant (+351% 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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