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. Keeping that in mind, here are three value stocks climbing an uphill battle and some other investments you should look into instead.
Kyndryl (KD)
Forward P/E Ratio: 7.8x
Born from IBM's managed infrastructure services business in a 2021 spinoff, Kyndryl (NYSE:KD) is the world's largest IT infrastructure services provider that designs, builds, and manages technology environments for enterprise customers.
Why Is KD Not Exciting?
- Sales tumbled by 4.8% annually over the last five years, showing market trends are working against its favor during this cycle
- Poor free cash flow margin of -0.4% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Negative returns on capital show that some of its growth strategies have backfired
Kyndryl’s stock price of $26.60 implies a valuation ratio of 7.8x forward P/E. To fully understand why you should be careful with KD, check out our full research report (it’s free for active Edge members).
Taboola (TBLA)
Forward P/E Ratio: 9.2x
Often appearing as those "You May Also Like" or "Recommended For You" boxes at the bottom of news articles, Taboola (NASDAQ:TBLA) operates a digital platform that recommends personalized content to users across publisher websites, helping both publishers monetize their sites and advertisers reach target audiences.
Why Are We Hesitant About TBLA?
- Day-to-day expenses have swelled relative to revenue over the last five years as its adjusted operating margin fell by 1.3 percentage points
- Earnings per share have contracted by 25.3% annually over the last four years, a headwind for returns as stock prices often echo long-term EPS performance
- Push for growth has led to negative returns on capital, signaling value destruction
Taboola is trading at $4.16 per share, or 9.2x forward P/E. Dive into our free research report to see why there are better opportunities than TBLA.
Brighthouse Financial (BHF)
Forward P/B Ratio: 0.8x
Spun off from MetLife in 2017 to focus specifically on retail financial products, Brighthouse Financial (NASDAQ:BHF) provides annuity contracts and life insurance products designed to help individuals protect wealth, generate income, and transfer assets.
Why Should You Sell BHF?
- Insurance offerings face significant market challenges this cycle as net premiums earned contracted by 1.4% annually over the last five years
- Annual book value per share declines of 11.1% for the past five years show its capital management struggled during this cycle
- Debt-to-equity ratio of 1.3× shows the firm has taken on excessive debt, leaving little room for error
At $65.44 per share, Brighthouse Financial trades at 0.8x forward P/B. To fully understand why you should be careful with BHF, check out our full research report (it’s free for active Edge members).
Stocks We Like More
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-micro-cap company Tecnoglass (+1,754% 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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