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. Keeping that in mind, here is one value stock with strong fundamentals and two with little support.
Two Value Stocks to Sell:
HP (HPQ)
Forward P/E Ratio: 11.4x
Born from the legendary Silicon Valley garage startup founded by Bill Hewlett and Dave Packard in 1939, HP (NYSE: HPQ) designs and sells personal computers, printers, and related technology products and services to consumers, businesses, and enterprises worldwide.
Why Do We Pass on HPQ?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.2% annually over the last five years
- Demand will likely fall over the next 12 months as Wall Street expects flat revenue
- Earnings per share were flat over the last two years while its revenue grew, showing its incremental sales were less profitable
HP’s stock price of $30.16 implies a valuation ratio of 11.4x forward P/E. Read our free research report to see why you should think twice about including HPQ in your portfolio.
Maximus (MMS)
Forward P/E Ratio: 6.8x
With nearly 50 years of experience translating public policy into operational programs that serve millions of citizens, Maximus (NYSE: MMS) provides operational services, clinical assessments, and technology solutions to government agencies in the U.S. and internationally.
Why Do We Think Twice About MMS?
- Flat sales over the last two years suggest it must find different ways to grow during this cycle
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 3.5%
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
At $54.85 per share, Maximus trades at 6.8x forward P/E. To fully understand why you should be careful with MMS, check out our full research report (it’s free).
One Value Stock to Buy:
Ameriprise Financial (AMP)
Forward P/E Ratio: 11.7x
Founded in 1894 and spun off from American Express in 2005, Ameriprise Financial (NYSE: AMP) provides financial planning, wealth management, asset management, and insurance products to help individuals and institutions achieve their financial goals.
Why Is AMP a Good Business?
- Share repurchases have increased shareholder returns as its annual earnings per share growth of 20.8% exceeded its revenue gains over the last five years
- Annual tangible book value per share growth of 19.1% over the last two years was superb and indicates its capital strength increased during this cycle
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
Ameriprise Financial is trading at $569.75 per share, or 11.7x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
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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 Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
