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.

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. That said, here are three value stocks with poor fundamentals and some alternatives you should consider instead.

Utz (UTZ)

Forward P/E Ratio: 14.1x

Tracing its roots back to 1921 when Bill and Salie Utz began making potato chips in their kitchen, Utz Brands (NYSE: UTZ) offers salty snacks such as potato chips, tortilla chips, pretzels, cheese snacks, and ready-to-eat popcorn, among others.

Why Do We Avoid UTZ?

1. 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
2. Modest revenue base of $1.41 billion gives it less fixed cost leverage and fewer distribution channels than larger companies
3. Below-average returns on capital indicate management struggled to find compelling investment opportunities

Utz’s stock price of $12.29 implies a valuation ratio of 14.1x forward P/E. Check out our free in-depth research report to learn more about why UTZ doesn’t pass our bar.

Graphic Packaging Holding (GPK)

Forward P/E Ratio: 9.2x

Founded in 1991, Graphic Packaging (NYSE: GPK) is a provider of paper-based packaging solutions for a wide range of products.

Why Should You Dump GPK?

1. Declining unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
2. Earnings per share have dipped by 5.7% annually over the past two years, which is concerning because stock prices follow EPS over the long term
3. Free cash flow margin dropped by 10.9 percentage points over the last five years, implying the company became more capital intensive as competition picked up

At $22.81 per share, Graphic Packaging Holding trades at 9.2x forward P/E. To fully understand why you should be careful with GPK, check out our full research report (it’s free).

ANI Pharmaceuticals (ANIP)

Forward P/E Ratio: 9.2x

With a diverse portfolio of 116 pharmaceutical products and a growing rare disease platform, ANI Pharmaceuticals (NASDAQ: ANIP) develops, manufactures, and markets branded and generic prescription pharmaceuticals, with a focus on rare disease treatments.

Why Are We Hesitant About ANIP?

1. Smaller revenue base of $674.1 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
2. Costs have risen faster than its revenue over the last five years, causing its adjusted operating margin to decline by 7 percentage points
3. Negative returns on capital show management lost money while trying to expand the business

ANI Pharmaceuticals is trading at $57.30 per share, or 9.2x forward P/E. Read our free research report to see why you should think twice about including ANIP in your portfolio.

Stocks We Like More

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 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.

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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.