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. That said, here is one value stock offering a compelling risk-reward profile and two climbing an uphill battle.
Two Value Stocks to Sell:
TreeHouse Foods (THS)
Forward P/E Ratio: 9.1x
Whether it be packaged crackers, broths, or beverages, Treehouse Foods (NYSE: THS) produces a wide range of private-label foods for grocery and food service customers.
Why Do We Steer Clear of THS?
- Shrinking unit sales over the past two years indicate demand is soft and that the company may need to revise its product strategy
- Commoditized products, bad unit economics, and high competition are reflected in its low gross margin of 16.5%
- Underwhelming 1.5% return on capital reflects management’s difficulties in finding profitable growth opportunities
TreeHouse Foods’s stock price of $18.13 implies a valuation ratio of 9.1x forward P/E. Read our free research report to see why you should think twice about including THS in your portfolio.
Amentum (AMTM)
Forward P/E Ratio: 11.1x
With operations spanning approximately 80 countries and a workforce of specialized engineers and technical experts, Amentum Holdings (NYSE: AMTM) provides advanced engineering and technology solutions to U.S. government agencies, allied governments, and commercial enterprises across defense, energy, and space sectors.
Why Does AMTM Give Us Pause?
- Annual sales growth of 3.8% over the last two years lagged behind its business services peers as its large revenue base made it difficult to generate incremental demand
- Demand is forecasted to shrink as its estimated sales for the next 12 months are flat
- Poor free cash flow margin of 1.9% for the last four years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
Amentum is trading at $25.11 per share, or 11.1x forward P/E. Check out our free in-depth research report to learn more about why AMTM doesn’t pass our bar.
One Value Stock to Watch:
Fidelis Insurance (FIHL)
Forward P/B Ratio: 0.7x
Founded in Bermuda in 2014 and designed to adapt nimbly to evolving market conditions, Fidelis Insurance (NYSE: FIHL) is a global specialty insurer and reinsurer that provides customized coverage across property, specialty, and bespoke risk solutions.
Why Do We Like FIHL?
- Net premiums earned surged by 20.6% annually over the past two years, reflecting strong market share gains this cycle
- Forecasted revenue growth of 10.4% for the next 12 months indicates its momentum over the last two years is sustainable
- Capital generation for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust book value per share growth of 20.7%
At $17.29 per share, Fidelis Insurance trades at 0.7x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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-small-cap company Comfort Systems (+782% 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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