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.
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 is one value stock trading at a big discount to its intrinsic value and two with little support.
Two Value Stocks to Sell:
PubMatic (PUBM)
Forward P/S Ratio: 1.5x
Powering billions of daily ad impressions across the open internet, PubMatic (NASDAQ: PUBM) operates a technology platform that helps publishers maximize revenue from their digital advertising inventory while giving advertisers more control and transparency.
Why Should You Dump PUBM?
- Annual revenue growth of 5.2% over the last three years was well below our standards for the software sector
- Estimated sales decline of 8% for the next 12 months implies a challenging demand environment
- Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 5 percentage points
PubMatic is trading at $8.67 per share, or 1.5x forward price-to-sales. To fully understand why you should be careful with PUBM, check out our full research report (it’s free).
Vontier (VNT)
Forward P/E Ratio: 13.1x
A spin-off of a spin-off, Vontier (NYSE: VNT) provides electronic products and systems to the transportation, automotive, and manufacturing sectors.
Why Do We Steer Clear of VNT?
- 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
- Free cash flow margin shrank by 7 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $42.55 per share, Vontier trades at 13.1x forward P/E. Check out our free in-depth research report to learn more about why VNT doesn’t pass our bar.
One Value Stock to Watch:
Hamilton Insurance Group (HG)
Forward P/B Ratio: 0.9x
Founded in 2013 and operating through three distinct underwriting platforms across four countries, Hamilton Insurance Group (NYSE: HG) operates global specialty insurance and reinsurance platforms across Lloyd's, Ireland, Bermuda, and the United States.
Why Are We Positive On HG?
- Market share has increased this cycle as its 49.7% annual revenue growth over the last two years was exceptional
- Net premiums earned expanded by 26% annually over the last two years, demonstrating exceptional market penetration this cycle
- Pre-tax profits and efficiency rose over the last two years as it benefited from some fixed cost leverage
Hamilton Insurance Group’s stock price of $24.41 implies a valuation ratio of 0.9x forward P/B. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out 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 Tecnoglass (+1,754% 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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