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. Keeping that in mind, here are three value stocks climbing an uphill battle and some other investments you should look into instead.

AMC Networks (AMCX)

Forward P/E Ratio: 3x

Originally the joint-venture of four cable television companies, AMC Networks (NASDAQ: AMCX) is a broadcaster producing a diverse range of television shows and movies.

Why Should You Dump AMCX?

1. Annual sales declines of 3.9% for the past five years show its products and services struggled to connect with the market
2. Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable
3. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

At $8.04 per share, AMC Networks trades at 3x forward P/E. Read our free research report to see why you should think twice about including AMCX in your portfolio.

Whirlpool (WHR)

Forward P/E Ratio: 11.2x

Credited with introducing the first automatic washing machine, Whirlpool (NYSE: WHR) is a manufacturer of a variety of home appliances.

Why Do We Think WHR Will Underperform?

1. Disappointing unit sales over the past two years indicate demand is soft and that the company may need to revise its strategy
2. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
3. High net-debt-to-EBITDA ratio of 6× could force the company to raise capital at unfavorable terms if market conditions deteriorate

Whirlpool is trading at $69.41 per share, or 11.2x forward P/E. Dive into our free research report to see why there are better opportunities than WHR.

Meritage Homes (MTH)

Forward P/E Ratio: 9.6x

Originally founded in 1985 in Arizona as Monterey Homes, Meritage Homes (NYSE: MTH) is a homebuilder specializing in designing and constructing energy-efficient and single-family homes in the US.

Why Are We Out on MTH?

1. Backlog has dropped by 34.4% on average over the past two years, suggesting it’s losing orders as competition picks up
2. Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 16.8% annually, worse than its revenue
3. Waning returns on capital imply its previous profit engines are losing steam

Meritage Homes’s stock price of $65.68 implies a valuation ratio of 9.6x forward P/E. To fully understand why you should be careful with MTH, check out our full research report (it’s free for active Edge members).

High-Quality Stocks for All Market Conditions

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% 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

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.