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.
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 climbing an uphill battle and some other investments you should look into instead.
Dole (DOLE)
Forward P/E Ratio: 11.1x
Known for its delicious pineapples and Hawaiian roots, Dole (NYSE: DOLE) is a global agricultural company specializing in fresh fruits and vegetables.
Why Do We Pass on DOLE?
- Muted 2% annual revenue growth over the last three years shows its demand lagged behind its consumer staples peers
- Easily substituted products (and therefore stiff competition) result in an inferior gross margin of 8.1% that must be offset through higher volumes
- Subpar operating margin of 2.6% constrains its ability to invest in process improvements or effectively respond to new competitive threats
Dole is trading at $15.26 per share, or 11.1x forward P/E. If you’re considering DOLE for your portfolio, see our FREE research report to learn more.
WeightWatchers (WW)
Forward P/E Ratio: 14.8x
Known by many for its old cable television commercials, WeightWatchers (NASDAQ: WW) is a wellness company offering a range of products and services promoting weight loss and healthy habits.
Why Should You Sell WW?
- Number of members has disappointed over the past two years, indicating weak demand for its offerings
- Operating margin of 12.3% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
- Cash-burning history makes us doubt the long-term viability of its business model
WeightWatchers’s stock price of $22.48 implies a valuation ratio of 14.8x forward P/E. Check out our free in-depth research report to learn more about why WW doesn’t pass our bar.
Stifel (SF)
Forward P/E Ratio: 11.6x
Tracing its roots back to 1890 when the firm was established in St. Louis, Stifel Financial (NYSE: SF) is a financial services firm that provides wealth management, investment banking, and institutional brokerage services to individuals, corporations, and institutions.
Why Does SF Give Us Pause?
- Earnings growth underperformed the sector average over the last five years as its EPS grew by just 8.2% annually
- Muted 6.8% annual book value per share growth over the last two years shows its capital generation lagged behind its financials peers
At $73.10 per share, Stifel trades at 11.6x forward P/E. To fully understand why you should be careful with SF, check out our full research report (it’s free).
Stocks We Like More
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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.
