3 Value Stocks We Approach with Caution

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.

Separating the winners from the value traps is a tough challenge, and that’s where StockStory comes in. Our job is to find you high-quality companies that will stand the test of time. That said, here are three value stocks with little support and some other investments you should consider instead.

Bumble (BMBL)

Forward EV/EBITDA Ratio: 1.9x

Started by the co-founder of Tinder, Whitney Wolfe Herd, Bumble (NASDAQ:BMBL) is a leading dating app built with women at the center.

Why Is BMBL Not Exciting?

1. 7.2% annual revenue growth over the last three years was slower than its consumer internet peers
2. Customer spending has dipped by 4.6% on average as it focused on growing its buyers
3. Projected sales decline of 9.7% for the next 12 months points to a tough demand environment ahead

Bumble is trading at $5.27 per share, or 1.9x forward EV/EBITDA. Read our free research report to see why you should think twice about including BMBL in your portfolio.

Calavo (CVGW)

Forward P/E Ratio: 13.8x

A trailblazer in the avocado industry, Calavo Growers (NASDAQ:CVGW) is a pioneering California-based provider of high-quality avocados and other fresh food products.

Why Do We Steer Clear of CVGW?

1. Products aren't resonating with the market as its revenue declined by 17.2% annually over the last three years
2. Subscale operations are evident in its revenue base of $693.7 million, meaning it has fewer distribution channels than its larger rivals
3. Gross margin of 10.1% is an output of its commoditized products

Calavo’s stock price of $24.80 implies a valuation ratio of 13.8x forward P/E. Check out our free in-depth research report to learn more about why CVGW doesn’t pass our bar.

Flowserve (FLS)

Forward P/E Ratio: 14.1x

Manufacturing the largest pump ever built for nuclear power generation, Flowserve (NYSE:FLS) manufactures and sells flow control equipment for various industries.

Why Are We Hesitant About FLS?

1. New orders were hard to come by as its average backlog growth of 1.6% over the past two years underwhelmed
2. Estimated sales growth of 5.5% for the next 12 months implies demand will slow from its two-year trend
3. Poor free cash flow margin of 5% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends

At $50.20 per share, Flowserve trades at 14.1x forward P/E. If you’re considering FLS for your portfolio, see our FREE research report to learn more.

Stocks We Like 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 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).

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 Kadant (+351% 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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