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.
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 is one value stock trading at a big discount to its intrinsic value and two best left ignored.
Two Value Stocks to Sell:
Shoe Carnival (SCVL)
Forward P/E Ratio: 11.4x
Known for its playful atmosphere that features carnival elements, Shoe Carnival (NASDAQ:SCVL) is a retailer that sells footwear from mainstream brands for the entire family.
Why Should You Dump SCVL?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Modest revenue base of $1.14 billion gives it less fixed cost leverage and fewer distribution channels than larger companies
- Performance over the past three years shows each sale was less profitable as its earnings per share dropped by 18.6% annually, worse than its revenue
Shoe Carnival’s stock price of $18.40 implies a valuation ratio of 11.4x forward P/E. Dive into our free research report to see why there are better opportunities than SCVL.
Dentsply Sirona (XRAY)
Forward P/E Ratio: 7.6x
With roots dating back to 1877 when it introduced the first dental electric drill, Dentsply Sirona (NASDAQ:XRAY) manufactures and sells professional dental equipment, technologies, and consumable products used by dentists and specialists worldwide.
Why Do We Steer Clear of XRAY?
- Constant currency growth was below our standards over the past two years, suggesting it might need to invest in product improvements to get back on track
- Negative returns on capital show that some of its growth strategies have backfired, and its shrinking returns suggest its past profit sources are losing steam
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
At $11.60 per share, Dentsply Sirona trades at 7.6x forward P/E. To fully understand why you should be careful with XRAY, check out our full research report (it’s free for active Edge members).
One Value Stock to Buy:
Stride (LRN)
Forward P/E Ratio: 7.7x
Formerly known as K12, Stride (NYSE:LRN) is an education technology company providing education solutions through digital platforms.
Why Are We Bullish on LRN?
- Number of enrollments has surged, pointing to elevated demand
- Free cash flow margin expanded by 7.4 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
- Rising returns on capital show management is finding more attractive investment opportunities
Stride is trading at $63.12 per share, or 7.7x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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 Exlservice (+354% 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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