Value investing has created more billionaires than any other strategy, like Warren Buffett, who built his fortune 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.
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:
Comcast (CMCSA)
Forward P/E Ratio: 6.7x
Formerly known as American Cable Systems, Comcast (NASDAQ: CMCSA) is a multinational telecommunications company offering a wide range of services.
Why Do We Pass on CMCSA?
- Sluggish trends in its domestic broadband customers suggest customers aren’t adopting its solutions as quickly as the company hoped
- Anticipated sales growth of 2.8% for the next year implies demand will be shaky
- Projected 3 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position
Comcast is trading at $27.81 per share, or 6.7x forward P/E. To fully understand why you should be careful with CMCSA, check out our full research report (it’s free for active Edge members).
La-Z-Boy (LZB)
Forward P/E Ratio: 12.3x
The prized possession of every mancave, La-Z-Boy (NYSE: LZB) is a furniture company specializing in recliners, sofas, and seats.
Why Do We Steer Clear of LZB?
- Products and services aren't resonating with the market as its revenue declined by 2.8% annually over the last two years
- Projected sales growth of 1.9% for the next 12 months suggests sluggish demand
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $31.70 per share, La-Z-Boy trades at 12.3x forward P/E. Check out our free in-depth research report to learn more about why LZB doesn’t pass our bar.
One Value Stock to Buy:
Instacart (CART)
Forward EV/EBITDA Ratio: 9.2x
Powering more than one billion grocery orders since its founding, Instacart (NASDAQ: CART) is an online grocery shopping and delivery platform that partners with retailers to help customers shop from local stores through its app or website.
Why Is CART a Good Business?
- Market share has increased over the last three years as its 19.5% annual revenue growth was exceptional
- Performance over the past three years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 40.5% outpaced its revenue gains
- Free cash flow margin increased by 23.9 percentage points over the last few years, giving the company more capital to invest or return to shareholders
Instacart’s stock price of $36.86 implies a valuation ratio of 9.2x forward EV/EBITDA. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% 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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