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.
Identifying genuine bargains from value traps is something many investors struggle with, which is why we started StockStory - to help you find the best companies. Keeping that in mind, here is one value stock with strong fundamentals and two climbing an uphill battle.
Two Value Stocks to Sell:
Expedia (EXPE)
Forward EV/EBITDA Ratio: 8.6x
Originally founded as a part of Microsoft, Expedia (NASDAQ: EXPE) is one of the world’s leading online travel agencies.
Why Does EXPE Give Us Pause?
- Customer spending has dipped by 1.5% on average as it focused on growing its bookings
- Estimated sales growth of 5.3% for the next 12 months implies demand will slow from its three-year trend
- High marketing expenses suggest it needs to spend heavily on new customer acquisition to sustain momentum
At $215.64 per share, Expedia trades at 8.6x forward EV/EBITDA. Check out our free in-depth research report to learn more about why EXPE doesn’t pass our bar.
Luxfer (LXFR)
Forward P/E Ratio: 12.1x
With its magnesium alloys used in the construction of the famous Spirit of St. Louis aircraft, Luxfer (NYSE: LXFR) offers specialized materials, components, and gas containment devices to various industries.
Why Do We Pass on LXFR?
- Sales tumbled by 1.9% annually over the last two years, showing market trends are working against its favor during this cycle
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 7.8 percentage points
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Luxfer is trading at $13.42 per share, or 12.1x forward P/E. Dive into our free research report to see why there are better opportunities than LXFR.
One Value Stock to Buy:
United Therapeutics (UTHR)
Forward P/E Ratio: 14.4x
Founded by a mother seeking treatment for her daughter's pulmonary arterial hypertension, United Therapeutics (NASDAQ: UTHR) develops and commercializes medications for chronic lung diseases and other life-threatening conditions, with a focus on pulmonary hypertension treatments.
Why Will UTHR Outperform?
- Market share has increased this cycle as its 20.7% annual revenue growth over the last two years was exceptional
- Strong free cash flow margin of 35.2% enables it to reinvest or return capital consistently, and its rising cash conversion increases its margin of safety
- Returns on capital are growing as management capitalizes on its market opportunities
United Therapeutics’s stock price of $440.06 implies a valuation ratio of 14.4x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. 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 Exlservice (+354% 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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