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. That said, here are three value stocks with little support and some other investments you should consider instead.
Mattel (MAT)
Forward P/E Ratio: 11.4x
Known for the creation of iconic toys such as Barbie and Hotwheels, Mattel (NASDAQ: MAT) is a global children's entertainment company specializing in the design and production of consumer products.
Why Is MAT Not Exciting?
- Muted 2.7% annual revenue growth over the last two years shows its demand lagged behind its consumer discretionary peers
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 2.5%
- Eroding returns on capital suggest its historical profit centers are aging
Mattel’s stock price of $18.41 implies a valuation ratio of 11.4x forward P/E. Dive into our free research report to see why there are better opportunities than MAT.
Verizon (VZ)
Forward P/E Ratio: 9.2x
Formed in 1984 as Bell Atlantic after the breakup of Bell System into seven companies, Verizon (NYSE: VZ) is a telecom giant providing a range of communications and internet services.
Why Do We Think VZ Will Underperform?
- Weak customer trends over the past two years suggest it may need to improve its products, pricing, or go-to-market strategy
- Estimated sales growth of 2.2% for the next 12 months is soft and implies weaker demand
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 1.8 percentage points over the next year
At $43.25 per share, Verizon trades at 9.2x forward P/E. Check out our free in-depth research report to learn more about why VZ doesn’t pass our bar.
Viatris (VTRS)
Forward P/E Ratio: 4.5x
Created through the 2020 merger of Mylan and Pfizer's Upjohn division, Viatris (NASDAQ: VTRS) is a healthcare company that develops, manufactures, and distributes branded and generic medicines across more than 165 countries worldwide.
Why Should You Sell VTRS?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 4.9% annually over the last two years
- Issuance of new shares over the last five years caused its earnings per share to fall by 12% annually while its revenue grew
- Push for growth has led to negative returns on capital, signaling value destruction, and its falling returns suggest its earlier profit pools are drying up
Viatris is trading at $10.50 per share, or 4.5x forward P/E. If you’re considering VTRS for your portfolio, see our FREE research report to learn more.
Stocks We Like More
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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