Value investing has created more billionaires than any other strategy, like Warren Buffett, who built his fortune 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.

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 with little support and some other investments you should consider instead.

Five9 (FIVN)

Forward P/S Ratio: 2x

Started in 2001, Five9 (NASDAQ: FIVN) offers software-as-a-service that makes it easier for companies to set up and efficiently run call centers to offer more tailored customer support.

Why Does FIVN Worry Us?

1. Revenue increased by 18% annually over the last three years, acceptable on an absolute basis but tepid for a software company enjoying secular tailwinds
2. Estimated sales growth of 8.4% for the next 12 months implies demand will slow from its three-year trend
3. Gross margin of 54.7% reflects its high servicing costs

Five9’s stock price of $26.70 implies a valuation ratio of 2x forward price-to-sales. To fully understand why you should be careful with FIVN, check out our full research report (it’s free).

Enovis (ENOV)

Forward P/E Ratio: 10.2x

With a focus on helping patients regain or maintain their natural motion, Enovis (NYSE: ENOV) develops and manufactures medical devices for orthopedic care, from injury prevention and pain management to joint replacement and rehabilitation.

Why Should You Sell ENOV?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 9.1% annually over the last five years
2. Negative returns on capital show that some of its growth strategies have backfired, and its falling returns suggest its earlier profit pools are drying up

Enovis is trading at $33.46 per share, or 10.2x forward P/E. If you’re considering ENOV for your portfolio, see our FREE research report to learn more.

Arbor Realty Trust (ABR)

Forward P/B Ratio: 0.9x

With roots dating back to 2003 and a focus on the stability of multifamily housing, Arbor Realty Trust (NYSE: ABR) is a specialized lender that provides financing solutions for multifamily and commercial real estate while also originating and servicing government-backed mortgage loans.

Why Do We Steer Clear of ABR?

1. Annual sales declines of 4.8% for the past two years show its products and services struggled to connect with the market during this cycle
2. Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 17.6% annually, worse than its revenue
3. Annual tangible book value per share declines of 2.3% for the past two years show its capital management struggled during this cycle

At $11.06 per share, Arbor Realty Trust trades at 0.9x forward P/B. Read our free research report to see why you should think twice about including ABR in your portfolio.

Stocks We Like More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market 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 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.