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.

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 with little support and some other investments you should consider instead.

Shoals (SHLS)

Forward P/E Ratio: 13.7x

Started in Huntsville, Alabama, Shoals (NASDAQ: SHLS) designs and manufactures products that make solar energy systems work more efficiently.

Why Does SHLS Worry Us?

1. Backlog growth averaged a weak 2.7% over the past two years, suggesting it may need to tweak its product roadmap or go-to-market strategy
2. Earnings per share have dipped by 2% annually over the past four years, which is concerning because stock prices follow EPS over the long term
3. Diminishing returns on capital suggest its earlier profit pools are drying up

Shoals is trading at $6 per share, or 13.7x forward P/E. To fully understand why you should be careful with SHLS, check out our full research report (it’s free).

Radian Group (RDN)

Forward P/B Ratio: 1x

Founded during the housing boom of 1977 and weathering multiple real estate cycles since, Radian Group (NYSE: RDN) provides mortgage insurance and real estate services, helping lenders manage risk and homebuyers achieve affordable homeownership.

Why Are We Cautious About RDN?

1. Net premiums earned tumbled by 3.8% annually over the last four years, showing market trends are working against its favor during this cycle
2. Day-to-day expenses have swelled relative to revenue over the last two years as its combined ratio increased by 34.1 percentage points
3. Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 6.6% annually

At $33.84 per share, Radian Group trades at 1x forward P/B. If you’re considering RDN for your portfolio, see our FREE research report to learn more.

Eastern Bank (EBC)

Forward P/B Ratio: 0.9x

Founded in 1818 as one of America's oldest mutual banks before converting to a public company in 2020, Eastern Bankshares (NASDAQ: EBC) operates as a bank holding company providing commercial and retail banking services primarily in Massachusetts, New Hampshire, and Rhode Island.

Why Are We Hesitant About EBC?

1. Loan losses and capital returns have eroded its tangible book value per share this cycle as its tangible book value per share declined by 7.7% annually over the last four years
2. Forecasted tangible book value per share decline of 3.5% for the upcoming 12 months implies profitability will deteriorate significantly
3. Low return on equity reflects management’s struggle to allocate funds effectively

Eastern Bank’s stock price of $15.88 implies a valuation ratio of 0.9x forward P/B. Check out our free in-depth research report to learn more about why EBC doesn’t pass our bar.

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 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-small-cap company Comfort Systems (+782% 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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