3 Value Stocks with Questionable Fundamentals

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

American Express Global Business Travel (GBTG)

Forward P/S Ratio: 1.5x

Originally spun off from American Express in 2014 but maintaining the Amex GBT brand, Global Business Travel Group (NYSE:GBTG) provides end-to-end business travel and expense management solutions, connecting corporate clients with travel suppliers and offering specialized software services.

Why Do We Pass on GBTG?

1. Sales trends were unexciting over the last two years as its 5.7% annual growth was well below the typical software company
2. Estimated sales growth of 3.8% for the next 12 months implies demand will slow from its two-year trend
3. Gross margin of 61.1% is below its competitors, leaving less money to invest in areas like marketing and R&D

American Express Global Business Travel is trading at $7.77 per share, or 1.5x forward price-to-sales. Read our free research report to see why you should think twice about including GBTG in your portfolio.

Covenant Logistics (CVLG)

Forward P/E Ratio: 10.7x

Started with 25 trucks and 50 trailers, Covenant Logistics (NASDAQ:CVLG) is a provider of expedited long haul freight services, offering a range of logistics solutions.

Why Do We Avoid CVLG?

1. Flat sales over the last two years suggest it must find different ways to grow during this cycle
2. Free cash flow margin shrank by 10 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

At $19.41 per share, Covenant Logistics trades at 10.7x forward P/E. To fully understand why you should be careful with CVLG, check out our full research report (it’s free for active Edge members).

Insperity (NSP)

Forward P/E Ratio: 16.6x

Pioneering the professional employer organization (PEO) industry it helped establish, Insperity (NYSE:NSP) provides human resources outsourcing services to small and medium-sized businesses, handling payroll, benefits, compliance, and HR administration.

Why Is NSP Not Exciting?

1. 2.8% annual revenue growth over the last two years was slower than its business services peers
2. Earnings per share fell by 18.7% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
3. 4.3 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

Insperity’s stock price of $34.08 implies a valuation ratio of 16.6x forward P/E. Dive into our free research report to see why there are better opportunities than NSP.

High-Quality Stocks for All Market Conditions

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).

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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