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.
This distinction between true value and value traps can challenge even the most skilled investors. Luckily for you, we started StockStory to help you uncover exceptional companies. That said, here is one value stock with strong fundamentals and two facing an uphill battle.
Two Value Stocks to Sell:
Donnelley Financial Solutions (DFIN)
Forward P/E Ratio: 9x
Born from the need to navigate increasingly complex financial regulations in the digital age, Donnelley Financial Solutions (NYSE:DFIN) provides software and technology-enabled services that help companies comply with SEC regulations and manage financial transactions and reporting requirements.
Why Are We Hesitant About DFIN?
- Sales tumbled by 3.6% annually over the last five years, showing market trends are working against it during this cycle
- Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 6.3% annually
Donnelley Financial Solutions’s stock price of $48.32 implies a valuation ratio of 9x forward P/E. If you’re considering DFIN for your portfolio, see our FREE research report to learn more.
Navient (NAVI)
Forward P/E Ratio: 11.1x
Spun off from Sallie Mae in 2014 to handle the company's loan servicing and collection operations, Navient (NASDAQ:NAVI) provides education loan servicing and business processing solutions that help manage federal student loans, private education loans, and government services.
Why Do We Steer Clear of NAVI?
- Annual sales declines of 21.6% for the past five years show its products and services struggled to connect with the market during this cycle
- Earnings per share have contracted by 15.7% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
- Elevated debt-to-equity ratio of 18.9× suggests the firm is overleveraged and may struggle to secure additional financing
At $9.46 per share, Navient trades at 11.1x forward P/E. Read our free research report to see why you should think twice about including NAVI in your portfolio.
One Value Stock to Watch:
EVERTEC (EVTC)
Forward P/E Ratio: 7.1x
Operating one of Latin America's leading PIN debit networks called ATH, EVERTEC (NYSE:EVTC) is a payment transaction processor and financial technology provider that enables merchants and financial institutions across Latin America and the Caribbean to accept and process electronic payments.
Why Do We Like EVTC?
- Solid 12.6% annual revenue growth over the last two years indicates its offerings solve complex business issues
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
EVERTEC is trading at $29.98 per share, or 7.1x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
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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-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.