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.
Identifying genuine bargains from value traps is something many investors struggle with, which is why we started StockStory - to help you find the best companies. Keeping that in mind, here is one value stock with strong fundamentals and two best left ignored.
Two value stocks to sell:
Oxford Industries (OXM)
Forward P/E ratio: 12.5x
The parent company of Tommy Bahama, Oxford Industries (NYSE:OXM) is a lifestyle fashion conglomerate with brands that embody outdoor happiness.
Why Are We Bearish on OXM?
- Annual revenue growth of 8.2% over the last five years was below our standards for the consumer discretionary sector
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Oxford Industries is trading at $28.49 per share, or 12.5x forward P/E. Check out our free in-depth research report to learn more about why OXM doesn’t pass our bar.
PulteGroup (PHM)
Forward P/E ratio: 13.3x
Having delivered over 850,000 homes since its founding in 1950, PulteGroup (NYSE:PHM) is one of America's largest homebuilders, constructing single-family homes, townhouses, and condominiums for first-time, move-up, and active adult buyers across 46 markets in 25 states.
Why Do We Pass on PHM?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 4% annually over the last two years
- Earnings per share have contracted by 15.5% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- Eroding returns on capital suggest its historical profit centers are aging
PulteGroup’s stock price of $130.90 implies a valuation ratio of 13.3x forward P/E. If you’re considering PHM for your portfolio, see our FREE research report to learn more.
One value stock to watch:
State Street (STT)
Forward P/E ratio: 11.3x
Dating back to 1792 when Boston's Long Wharf was the center of global shipping and trade, State Street (NYSE:STT) provides custody, investment management, and other financial services to institutional investors like pension funds, asset managers, and central banks worldwide.
Why Are We Positive on STT?
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Acceptable return on equity suggests management generated shareholder value by investing in profitable projects
At $169.90 per share, State Street trades at 11.3x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks we like even more
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.