The low valuation multiples for value stocks provide a margin of safety that growth stocks rarely offer. However, the challenge lies in determining whether these cheap assets are genuinely undervalued or simply on sale due to their potentially deteriorating business models.
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 is one value stock offering a compelling risk-reward profile and two with little support.
Two Value Stocks to Sell:
Macy's (M)
Forward P/E Ratio: 10.6x
With a storied history that began with its 1858 founding, Macy’s (NYSE: M) is a department store chain that sells clothing, cosmetics, accessories, and home goods.
Why Are We Out on M?
- Recent store closures and weak same-store sales point to soft demand and an operational restructuring
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Earnings per share have contracted by 10.7% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance
At $22.79 per share, Macy's trades at 10.6x forward P/E. Dive into our free research report to see why there are better opportunities than M.
The Marzetti Company (MZTI)
Forward P/E Ratio: 14.9x
Known for its frozen garlic bread and Parkerhouse rolls, The Marzetti Company (NASDAQ: MZTI) sells bread, dressing, and dips to the retail and food service channels.
Why Does MZTI Fall Short?
- Lackluster 1.6% annual revenue growth over the last three years indicates the company is losing ground to competitors
- Modest revenue base of $1.91 billion gives it less fixed cost leverage and fewer distribution channels than larger companies
- Easily substituted products (and therefore stiff competition) result in an inferior gross margin of 23.9% that must be offset through higher volumes
The Marzetti Company’s stock price of $99.57 implies a valuation ratio of 14.9x forward P/E. Read our free research report to see why you should think twice about including MZTI in your portfolio.
One Value Stock to Watch:
Asure Software (ASUR)
Forward P/S Ratio: 1.3x
Operating in the often-overlooked smaller metropolitan markets where HR expertise can be scarce, Asure Software (NASDAQ: ASUR) provides cloud-based human capital management software and services that help small and medium-sized businesses manage payroll, taxes, time tracking, and HR compliance.
Why Are We Fans of ASUR?
- 16.1% annual revenue growth over the last two years was better than the sector average, highlighting the value of its products and services
- Average billings growth of 26.2% over the last year enhances its liquidity and shows there is steady demand for its products
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
Asure Software is trading at $7.68 per share, or 1.3x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
