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. That said, here are two value stocks with strong fundamentals and one best left ignored.
One Value Stock to Sell:
Alamo (ALG)
Forward P/E Ratio: 13.7x
Expanding its markets through acquisitions since its founding, Alamo (NYSE: ALG) designs, manufactures, and services vegetation management and infrastructure maintenance equipment for governmental, industrial, and agricultural use.
Why Are We Hesitant About ALG?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.2% annually over the last two years
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 4.5%
- Earnings per share have contracted by 9.7% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
At $151.12 per share, Alamo trades at 13.7x forward P/E. Dive into our free research report to see why there are better opportunities than ALG.
Two Value Stocks to Watch:
Broadridge (BR)
Forward P/E Ratio: 14.6x
Processing over $10 trillion in equity and fixed income trades daily and managing proxy voting for over 800 million equity positions, Broadridge Financial Solutions (NYSE: BR) provides technology-driven solutions that power investing, governance, and communications for banks, broker-dealers, asset managers, and public companies.
Why Does BR Stand Out?
- 8.7% annual revenue growth over the last five years surpassed the sector average as its services resonated with customers
- Free cash flow margin jumped by 10.7 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
- Rising returns on capital show management is finding more attractive investment opportunities
Broadridge’s stock price of $150.48 implies a valuation ratio of 14.6x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Ameriprise Financial (AMP)
Forward P/E Ratio: 10.6x
Founded in 1894 and spun off from American Express in 2005, Ameriprise Financial (NYSE: AMP) provides financial planning, wealth management, asset management, and insurance products to help individuals and institutions achieve their financial goals.
Why Is AMP a Good Business?
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 23.9% exceeded its revenue gains over the last five years
- Impressive 18.7% annual tangible book value per share growth over the last two years indicates it’s building equity value this cycle
- ROE punches in at 63.7%, illustrating management’s expertise in identifying profitable investments
Ameriprise Financial is trading at $471.24 per share, or 10.6x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
