3 Value Stocks with Warning Signs

October 09, 2025 at 09:21 AM EDT

POST Cover Image

Value stocks typically trade at discounts to the broader market, offering patient investors the opportunity to buy businesses when they’re out of favor. The key risk, however, is that these stocks are usually cheap for a reason – five cents for a piece of fruit may seem like a great deal until you find out it’s rotten.

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 are three value stocks with little support and some other investments you should consider instead.

Post (POST)

Forward P/E Ratio: 13.7x

Founded in 1895, Post (NYSE: POST) is a packaged food company known for its namesake breakfast cereal and healthier-for-you snacks.

Why Does POST Worry Us?

Falling unit sales over the past two years imply it may need to invest in product improvements to get back on track
Free cash flow margin shrank by 1.9 percentage points over the last year, suggesting the company is consuming more capital to stay competitive
Low returns on capital reflect management’s struggle to allocate funds effectively

At $106.53 per share, Post trades at 13.7x forward P/E. If you’re considering POST for your portfolio, see our FREE research report to learn more.

Bristol-Myers Squibb (BMY)

Forward P/E Ratio: 7x

With roots dating back to 1887 and a transformative merger in 1989 that gave the company its current name, Bristol-Myers Squibb (NYSE: BMY) discovers, develops, and markets prescription medications for serious diseases including cancer, blood disorders, immunological conditions, and cardiovascular diseases.

Why Do We Think Twice About BMY?

Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 3.7% for the last two years
Projected sales decline of 4.5% for the next 12 months points to a tough demand environment ahead
Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

Bristol-Myers Squibb’s stock price of $44.60 implies a valuation ratio of 7x forward P/E. Read our free research report to see why you should think twice about including BMY in your portfolio.

Donnelley Financial Solutions (DFIN)

Forward P/E Ratio: 14.5x

Born from the need to navigate increasingly complex financial regulations in the digital age, Donnelley Financial Solutions (NYSE: DFIN) provides software and technology-enabled services that help companies comply with SEC regulations and manage financial transactions and reporting requirements.

Why Is DFIN Not Exciting?

Sales tumbled by 2.5% annually over the last five years, showing market trends are working against its favor during this cycle
Earnings growth underperformed the sector average over the last two years as its EPS grew by just 4.3% annually

Donnelley Financial Solutions is trading at $53.17 per share, or 14.5x forward P/E. To fully understand why you should be careful with DFIN, check out our full research report (it’s free for active Edge members).

High-Quality Stocks for All Market Conditions

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 6 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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3 Value Stocks with Warning Signs

Post (POST)

Bristol-Myers Squibb (BMY)

Donnelley Financial Solutions (DFIN)

High-Quality Stocks for All Market Conditions

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