2 Value Stocks Worth Investigating and 1 That Underwhelm

Value investing has produced some of the world’s most famous investing billionaires, including Warren Buffett, David Einhorn, and Seth Klarman, who built their fortunes by purchasing wonderful businesses at reasonable prices. But these hidden gems are few and far between - many stocks that appear cheap often stay that way because they face structural issues.

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. Keeping that in mind, here are two value stocks offering compelling risk-reward profiles and one with little support.

One Value Stock to Sell:

LGI Homes (LGIH)

Forward P/E Ratio: 13.7x

Based in Texas, LGI Homes (NASDAQ:LGIH) is a homebuilding company specializing in constructing affordable, entry-level single-family homes in desirable communities across the United States.

Why Are We Out on LGIH?

1. Sales pipeline suggests its future revenue growth won’t meet our standards as its backlog averaged 10.3% declines over the past two years
2. Waning returns on capital imply its previous profit engines are losing steam
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

At $53.64 per share, LGI Homes trades at 13.7x forward P/E. Dive into our free research report to see why there are better opportunities than LGIH.

Two Value Stocks to Watch:

Incyte (INCY)

Forward P/E Ratio: 14.3x

Founded in 1991 and evolving from a genomics research firm to a commercial-stage drug developer, Incyte (NASDAQ:INCY) is a biopharmaceutical company that discovers, develops, and commercializes proprietary therapeutics for cancer and inflammatory diseases.

Why Could INCY Be a Winner?

1. Offerings and unique value proposition resonate with customers, as seen in its above-market 15.5% annual sales growth over the last two years
2. Share repurchases over the last five years enabled its annual earnings per share growth of 60.8% to outpace its revenue gains
3. Free cash flow margin increased by 6.8 percentage points over the last five years, giving the company more capital to invest or return to shareholders

Incyte is trading at $102.64 per share, or 14.3x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Visteon (VC)

Forward P/E Ratio: 10.2x

Originally spun off from Ford Motor Company in 2000, Visteon (NYSE:VC) designs and manufactures cockpit electronics for vehicles, including digital instrument clusters, displays, infotainment systems, and battery management systems.

Why Do We Like VC?

1. Earnings per share grew by 36.6% annually over the last two years and trumped its peers
2. Free cash flow margin grew by 9.3 percentage points over the last five years, giving the company more chips to play with
3. Returns on capital are growing as management capitalizes on its market opportunities

Visteon’s stock price of $91.69 implies a valuation ratio of 10.2x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check 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 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.