Laser Focus World is an industry bedrock—first published in 1965 and still going strong. We publish original articles about cutting-edge advances in lasers, optics, photonics, sensors, and quantum technologies, as well as test and measurement, and the shift currently underway to usher in the photonic integrated circuits, optical interconnects, and copackaged electronics and photonics to deliver the speed and efficiency essential for data centers of the future.

Our 80,000 qualified print subscribers—and 130,000 12-month engaged online audience—trust us to dive in and provide original journalism you won’t find elsewhere covering key emerging areas such as laser-driven inertial confinement fusion, lasers in space, integrated photonics, chipscale lasers, LiDAR, metasurfaces, high-energy laser weaponry, photonic crystals, and quantum computing/sensors/communications. We cover the innovations driving these markets.

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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

3 Value Stocks Skating on Thin Ice

LAD Cover Image

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 are three value stocks with poor fundamentals and some alternatives you should consider instead.

Lithia (LAD)

Forward P/E Ratio: 8.4x

With a strong presence in the Western US, Lithia Motors (NYSE: LAD) sells a wide range of vehicles, including new and used cars, trucks, SUVs, and luxury vehicles from various manufacturers.

Why Are We Hesitant About LAD?

  1. Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
  2. Widely-available products (and therefore stiff competition) result in an inferior gross margin of 16% that must be offset through higher volumes
  3. 7× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly

Lithia’s stock price of $294.50 implies a valuation ratio of 8.4x forward price-to-earnings. Check out our free in-depth research report to learn more about why LAD doesn’t pass our bar.

Griffon (GFF)

Forward P/E Ratio: 12.1x

Initially in the defense industry, Griffon (NYSE: GFF) is a now diversified company specializing in home improvement, professional equipment, and building products.

Why Does GFF Worry Us?

  1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 5.2% annually over the last two years
  2. Estimated sales growth of 1.4% for the next 12 months is soft and implies weaker demand

Griffon is trading at $69.70 per share, or 12.1x forward price-to-earnings. If you’re considering GFF for your portfolio, see our FREE research report to learn more.

Dentsply Sirona (XRAY)

Forward P/E Ratio: 8.4x

Founded in 1899, Dentsply Sirona (NASDAQ: XRAY) is a leading manufacturer of dental equipment, consumables, and technology solutions.

Why Should You Sell XRAY?

  1. Constant currency revenue growth has disappointed over the past two years and shows demand was soft
  2. Sales were less profitable over the last five years as its earnings per share fell by 7.4% annually, worse than its revenue declines
  3. Push for growth has led to negative returns on capital, signaling value destruction, and its shrinking returns suggest its past profit sources are losing steam

At $16.05 per share, Dentsply Sirona trades at 8.4x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than XRAY.

Stocks We Like More

The elections are now behind us. With rates dropping and inflation cooling, many analysts expect a breakout market - and we’re zeroing in on the stocks that could benefit immensely.

Take advantage of the rebound by checking out 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 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.

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