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. That said, here are three value stocks with little support and some other investments you should consider instead.
TEGNA (TGNA)
Forward P/E Ratio: 11.4x
Spun out of Gannett in 2015, TEGNA (NYSE: TGNA) is a media company operating a network of television stations and digital platforms, focusing on local news and community content.
Why Are We Out on TGNA?
- Annual sales declines of 2.5% for the past two years show its products and services struggled to connect with the market
- Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
- Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 4.5 percentage points
At $21.22 per share, TEGNA trades at 11.4x forward P/E. Check out our free in-depth research report to learn more about why TGNA doesn’t pass our bar.
Insteel (IIIN)
Forward P/E Ratio: 14.9x
Growing from a small wire manufacturer to one of the largest in the U.S., Insteel (NYSE: IIIN) provides steel wire reinforcing products for concrete.
Why Do We Think Twice About IIIN?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 7% annually over the last two years
- Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Insteel’s stock price of $38.52 implies a valuation ratio of 14.9x forward P/E. To fully understand why you should be careful with IIIN, check out our full research report (it’s free).
Brink's (BCO)
Forward P/E Ratio: 14x
Known for its iconic armored trucks that have been a fixture in American cities since 1859, Brink's (NYSE: BCO) provides secure transportation and management of cash and valuables for banks, retailers, and other businesses worldwide.
Why Are We Wary of BCO?
- Muted 3.5% annual revenue growth over the last two years shows its demand lagged behind its business services peers
- Free cash flow margin shrank by 1.1 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Underwhelming 14% return on capital reflects management’s difficulties in finding profitable growth opportunities
Brink's is trading at $111.72 per share, or 14x forward P/E. Dive into our free research report to see why there are better opportunities than BCO.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check 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).
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