3 Value Stocks with Open Questions

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 three value stocks climbing an uphill battle and some other investments you should look into instead.

Academy Sports (ASO)

Forward P/E Ratio: 8.7x

Founded in 1938 as a tire shop before expanding into fishing equipment, Academy Sports & Outdoor (NASDAQ:ASO) sells a broad selection of sporting goods but is still known for its outdoor activity merchandise.

Why Does ASO Worry Us?

1. Lackluster 4% annual revenue growth over the last six years indicates the company is losing ground to competitors
2. Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
3. Earnings per share have dipped by 2.5% annually over the past four years, which is concerning because stock prices follow EPS over the long term

Academy Sports’s stock price of $55 implies a valuation ratio of 8.7x forward P/E. Read our free research report to see why you should think twice about including ASO in your portfolio.

Spectrum Brands (SPB)

Forward P/E Ratio: 13.4x

A leader in multiple consumer product categories, Spectrum Brands (NYSE:SPB) is a diversified company with a portfolio of trusted brands spanning home appliances, garden care, personal care, and pet care.

Why Do We Steer Clear of SPB?

1. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
2. Negative free cash flow raises questions about the return timeline for its investments
3. Underwhelming 0.8% return on capital reflects management’s difficulties in finding profitable growth opportunities

At $55.01 per share, Spectrum Brands trades at 13.4x forward P/E. Dive into our free research report to see why there are better opportunities than SPB.

Ball (BALL)

Forward P/E Ratio: 13.3x

Started with a $200 loan in 1880, Ball (NYSE:BLL) manufactures aluminum packaging for beverages, personal care, and household products as well as aerospace systems and other technologies.

Why Are We Out on BALL?

1. 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
2. High input costs result in an inferior gross margin of 21.6% that must be offset through higher volumes
3. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital

Ball is trading at $50.25 per share, or 13.3x forward P/E. To fully understand why you should be careful with BALL, check out our full research report (it’s free for active Edge members).

Stocks We Like 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 5 Strong Momentum 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).

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