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. That said, here are three value stocks with little support and some other investments you should consider instead.

Dine Brands (DIN)

Forward P/E Ratio: 4.9x

Operating a franchise model, Dine Brands (NYSE: DIN) is a casual restaurant chain that owns the Applebee’s and IHOP banners.

Why Do We Steer Clear of DIN?

1. Poor same-store sales performance over the past two years indicates it’s having trouble bringing new diners into its restaurants
2. Performance over the past six years shows each sale was less profitable, as its earnings per share fell by 10.1% annually
3. 6× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings

Dine Brands is trading at $25.63 per share, or 4.9x forward P/E. To fully understand why you should be careful with DIN, check out our full research report (it’s free).

Newmark (NMRK)

Forward P/E Ratio: 8.9x

Founded in 1929, Newmark (NASDAQ: NMRK) provides commercial real estate services, including leasing advisory, global corporate services, investment sales and capital markets, property and facilities management, valuation and advisory, and consulting.

Why Are We Out on NMRK?

1. Muted 4.9% annual revenue growth over the last five years shows its demand lagged behind its consumer discretionary peers
2. Negative free cash flow raises questions about the return timeline for its investments
3. ROIC of 3.1% reflects management’s challenges in identifying attractive investment opportunities

Newmark’s stock price of $12.63 implies a valuation ratio of 8.9x forward P/E. Read our free research report to see why you should think twice about including NMRK in your portfolio.

NetApp (NTAP)

Forward P/E Ratio: 13.8x

Founded in 1992 as a pioneer in networked storage technology, NetApp (NASDAQ: NTAP) provides data storage and management solutions that help organizations store, protect, and optimize their data across on-premises data centers and public clouds.

Why Does NTAP Worry Us?

1. Muted 1.6% annual revenue growth over the last two years shows its demand lagged behind its business services peers
2. Products, pricing, or go-to-market strategy may need some adjustments as its 3% average billings growth over the past two years was weak
3. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 2.7%

At $106.20 per share, NetApp trades at 13.8x forward P/E. Check out our free in-depth research report to learn more about why NTAP doesn’t pass our bar.

Stocks We Like More

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking 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 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 Kadant (+351% 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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