The low valuation multiples for value stocks provide a margin of safety that growth stocks rarely offer. However, the challenge lies in determining whether these cheap assets are genuinely undervalued or simply on sale due to their potentially deteriorating business models.
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 offering a compelling risk-reward profile and two best left ignored.
Two Value Stocks to Sell:
Zimmer Biomet (ZBH)
Forward P/E Ratio: 11.3x
With a history dating back to 1927 and a presence in over 100 countries worldwide, Zimmer Biomet (NYSE: ZBH) designs and manufactures orthopedic products including knee and hip replacements, surgical tools, and robotic technologies for joint reconstruction and spine surgeries.
Why Are We Cautious About ZBH?
- Muted 4.4% annual revenue growth over the last five years shows its demand lagged behind its healthcare peers
- Annual earnings per share growth of 2.4% underperformed its revenue over the last five years, showing its incremental sales were less profitable
- ROIC of 4.2% reflects management’s challenges in identifying attractive investment opportunities
Zimmer Biomet’s stock price of $100.73 implies a valuation ratio of 11.3x forward P/E. Check out our free in-depth research report to learn more about why ZBH doesn’t pass our bar.
Ingram Micro (INGM)
Forward P/E Ratio: 8.3x
Operating as the crucial link in the global technology supply chain with a presence in 57 countries, Ingram Micro (NYSE: INGM) is a global technology distributor that connects manufacturers with resellers, providing hardware, software, cloud services, and logistics expertise.
Why Does INGM Fall Short?
- Sales stagnated over the last five years and signal the need for new growth strategies
- Earnings per share lagged its peers over the last four years as they only grew by 3.4% annually
- Low free cash flow margin of 0% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
At $28.71 per share, Ingram Micro trades at 8.3x forward P/E. Read our free research report to see why you should think twice about including INGM in your portfolio.
One Value Stock to Buy:
Occidental Petroleum (OXY)
Forward P/E Ratio: 12.9x
Backed by Warren Buffett's Berkshire Hathaway as a major shareholder, Occidental Petroleum (NYSE: OXY) explores for, develops, and produces oil, natural gas liquids, and natural gas, primarily in the United States and Middle East.
Why Will OXY Beat the Market?
- Impressive 8.4% annual revenue growth over the last ten years indicates it’s winning market share this cycle
- Enormous revenue base of $24.47 billion provides significant leverage in supplier negotiations
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Occidental Petroleum is trading at $59.14 per share, or 12.9x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth 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-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
