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.

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. Keeping that in mind, here is one value stock offering a compelling risk-reward profile and two with little support.

Two Value Stocks to Sell:

Fortive (FTV)

Forward P/E Ratio: 13x

Taking its name from the Latin root of "strong", Fortive (NYSE: FTV) manufactures products and develops industrial software for numerous industries.

Why Are We Wary of FTV?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Anticipated sales growth of 1.8% for the next year implies demand will be shaky
3. Low returns on capital reflect management’s struggle to allocate funds effectively, and its shrinking returns suggest its past profit sources are losing steam

Fortive is trading at $53.06 per share, or 13x forward P/E. To fully understand why you should be careful with FTV, check out our full research report (it’s free).

Solventum (SOLV)

Forward P/E Ratio: 13.4x

Founded in 1985, Solventum (NYSE: SOLV) develops, manufactures, and commercializes a portfolio of healthcare products and services addressing critical customer and therapeutic patient needs.

Why Are We Hesitant About SOLV?

1. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
2. Day-to-day expenses have swelled relative to revenue over the last two years as its adjusted operating margin fell by 4.2 percentage points
3. Earnings per share fell by 21.9% annually over the last two years while its revenue grew, showing its incremental sales were much less profitable

At $75.88 per share, Solventum trades at 13.4x forward P/E. Dive into our free research report to see why there are better opportunities than SOLV.

One Value Stock to Watch:

Semrush (SEMR)

Forward P/S Ratio: 2.9x

Started by Oleg Shchegolev while still in university, Semrush (NYSE: SEMR) is a software-as-a-service platform that helps companies optimize their search engine and content marketing efforts.

Why Do We Like SEMR?

1. Average billings growth of 24.8% over the last year enhances its liquidity and shows there is steady demand for its products
2. Sales outlook for the upcoming 12 months implies the business will stay on its desirable three-year growth trajectory
3. Software is difficult to replicate at scale and leads to a premier gross margin of 82.1%

Semrush’s stock price of $9.14 implies a valuation ratio of 2.9x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 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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