Value investing has produced some of the world’s most famous investing billionaires, including Warren Buffett, David Einhorn, and Seth Klarman, who built their fortunes 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.
This distinction between true value and value traps can challenge even the most skilled investors. Luckily for you, we started StockStory to help you uncover exceptional companies. Keeping that in mind, here are three value stocks climbing an uphill battle and some other investments you should look into instead.
Dropbox (DBX)
Forward P/S Ratio: 2.6x
Originally named after the founders' tendency to "drop" files into a shared folder, Dropbox (NASDAQ: DBX) provides a content collaboration platform that helps individuals and teams store, organize, share, and work on files from anywhere.
Why Do We Pass on DBX?
- Offerings struggled to generate interest as its billings were flat over the last year
- Sales are projected to tank by 1.1% over the next 12 months as demand evaporates
- Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 1.9 percentage points
At $24.41 per share, Dropbox trades at 2.6x forward price-to-sales. Check out our free in-depth research report to learn more about why DBX doesn’t pass our bar.
Griffon (GFF)
Forward P/E Ratio: 17.6x
Initially in the defense industry, Griffon (NYSE: GFF) is a now diversified company specializing in home improvement, professional equipment, and building products.
Why Do We Think Twice About GFF?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.7% annually over the last two years
- Sales are projected to tank by 28.7% over the next 12 months as its demand continues evaporating
Griffon’s stock price of $91.50 implies a valuation ratio of 17.6x forward P/E. To fully understand why you should be careful with GFF, check out our full research report (it’s free).
Oshkosh (OSK)
Forward P/E Ratio: 15.4x
Oshkosh (NYSE: OSK) manufactures specialty vehicles for the defense, fire, emergency, and commercial industry, operating various brand subsidiaries within each industry.
Why Does OSK Worry Us?
- Demand cratered as it couldn’t win new orders over the past two years, leading to an average 4.3% decline in its backlog
- Gross margin of 16.5% is below its competitors, leaving less money to invest in areas like marketing and R&D
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 4.5% annually
Oshkosh is trading at $174.48 per share, or 15.4x forward P/E. If you’re considering OSK for your portfolio, see our FREE research report to learn more.
Stocks We Like More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 9 Market-Beating Stocks. 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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
