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.
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. That said, here are three value stocks climbing an uphill battle and some other investments you should look into instead.
Hain Celestial (HAIN)
Forward P/E Ratio: 4.5x
Sold in over 75 countries around the world, Hain Celestial (NASDAQ: HAIN) is a natural and organic food company whose products range from snacks to teas to baby food.
Why Should You Dump HAIN?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Sales are projected to tank by 5% over the next 12 months as its demand continues evaporating
- Sales were less profitable over the last three years as its earnings per share fell by 43.5% annually, worse than its revenue declines
Hain Celestial is trading at $1.92 per share, or 4.5x forward P/E. Dive into our free research report to see why there are better opportunities than HAIN.
Oshkosh (OSK)
Forward P/E Ratio: 9.2x
Oshkosh (NYSE: OSK) manufactures specialty vehicles for the defense, fire, emergency, and commercial industry, operating various brand subsidiaries within each industry.
Why Are We Hesitant About OSK?
- Backlog growth averaged a weak 4% over the past two years, suggesting it may need to tweak its product roadmap or go-to-market strategy
- Sales are projected to remain flat over the next 12 months as demand decelerates from its two-year trend
- Free cash flow margin dropped by 9.9 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Oshkosh’s stock price of $101.90 implies a valuation ratio of 9.2x forward P/E. To fully understand why you should be careful with OSK, check out our full research report (it’s free).
DXC (DXC)
Forward P/E Ratio: 4.4x
Born from the 2017 merger of Computer Sciences Corporation and HP Enterprise's services business, DXC Technology (NYSE: DXC) is a global IT services company that helps businesses transform their technology infrastructure, applications, and operations.
Why Are We Out on DXC?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
- ROIC of 1.4% reflects management’s challenges in identifying attractive investment opportunities, and its shrinking returns suggest its past profit sources are losing steam
At $14.94 per share, DXC trades at 4.4x forward P/E. If you’re considering DXC for your portfolio, see our FREE research report to learn more.
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 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 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.
