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 is one value stock trading at a big discount to its intrinsic value and two with little support.

Two Value Stocks to Sell:

Denny's (DENN)

Forward P/E Ratio: 10.2x

Open around the clock, Denny’s (NASDAQ: DENN) is a chain of diner restaurants serving breakfast and traditional American fare.

Why Do We Pass on DENN?

1. Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new restaurants
2. Capital intensity has ramped up over the last year as its free cash flow margin decreased by 8.7 percentage points
3. Short cash runway increases the probability of a capital raise that dilutes existing shareholders

Denny’s stock price of $4.99 implies a valuation ratio of 10.2x forward P/E. Check out our free in-depth research report to learn more about why DENN doesn’t pass our bar.

Biogen (BIIB)

Forward P/E Ratio: 9.9x

Founded in 1978 and pioneering treatments for some of medicine's most complex challenges, Biogen (NASDAQ: BIIB) develops and markets therapies for neurological conditions, including multiple sclerosis, Alzheimer's disease, spinal muscular atrophy, and rare diseases.

Why Are We Hesitant About BIIB?

1. Sales tumbled by 7% annually over the last five years, showing market trends are working against its favor during this cycle
2. Estimated sales decline of 6.7% for the next 12 months implies a challenging demand environment
3. Sales were less profitable over the last five years as its earnings per share fell by 15.2% annually, worse than its revenue declines

At $151.36 per share, Biogen trades at 9.9x forward P/E. If you’re considering BIIB for your portfolio, see our FREE research report to learn more.

One Value Stock to Watch:

Abercrombie and Fitch (ANF)

Forward P/E Ratio: 7.7x

Founded as an outdoor and sporting brand, Abercrombie & Fitch (NYSE: ANF) evolved to become a specialty retailer that sells its own brand of fashionable clothing to young adults.

Why Are We Fans of ANF?

1. Locations open for at least a year are seeing increased demand as same-store sales have averaged 13.5% growth over the past two years
2. Differentiated product assortment leads to a best-in-class gross margin of 63.6%
3. Earnings per share grew by 48.1% annually over the last six years and trumped its peers

Abercrombie and Fitch is trading at $76.49 per share, or 7.7x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.

Stocks We Like Even More

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at 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 Tecnoglass (+1,754% 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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