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, and a low valuation can reflect underlying business challenges rather than a genuine bargain.
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. That said, here is one value stock with strong fundamentals and two best left ignored.
Two Value Stocks to Sell:
Keurig Dr Pepper (KDP)
Forward P/E Ratio: 12.7x
Born out of a 2018 merger between Keurig Green Mountain and Dr Pepper Snapple, Keurig Dr Pepper (NASDAQ:KDP) is a consumer staples powerhouse boasting a portfolio of beverages including sodas, coffees, and juices.
Why Are We Hesitant About KDP?
- Free cash flow margin has shown no improvement over the last year
- ROIC of 5.7% reflects management’s challenges in identifying attractive investment opportunities
- 5× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
Keurig Dr Pepper is trading at $31.98 per share, or 12.7x forward P/E. To fully understand why you should be careful with KDP, check out our full research report (it’s free).
Voya Financial (VOYA)
Forward P/E Ratio: 9.1x
Originally spun off from Dutch financial giant ING in 2013 and rebranded with a name suggesting "voyage," Voya Financial (NYSE:VOYA) provides workplace benefits and savings solutions to U.S. employers, helping their employees achieve better financial outcomes through retirement plans and insurance products.
Why Should You Sell VOYA?
- 4.4% annual revenue growth over the last two years was slower than its financials peers
- Incremental sales over the last two years were less profitable as its earnings per share were flat while its revenue grew
- Loan losses and capital returns have eroded its tangible book value per share this cycle as its tangible book value per share declined by 14.6% annually over the last five years
Voya Financial’s stock price of $97.27 implies a valuation ratio of 9.1x forward P/E. Check out our free in-depth research report to learn more about why VOYA doesn’t pass our bar.
One Value Stock to Buy:
Hamilton Lane (HLNE)
Forward P/E Ratio: 12.2x
With over $100 billion in assets under management and supervision, Hamilton Lane (NASDAQ:HLNE) is an investment management firm that specializes in private markets, offering advisory services and fund solutions to institutional and private wealth investors.
Why Are We Bullish on HLNE?
- Annual revenue growth of 19.6% over the past five years was outstanding, reflecting market share gains this cycle
- Incremental sales over the last two years boosted profitability as its annual earnings per share growth of 20.5% outstripped its revenue performance
- Industry-leading 34.4% return on equity demonstrates management’s skill in finding high-return investments
At $86.34 per share, Hamilton Lane trades at 12.2x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
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.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
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 Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.