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.
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 with little support and some other investments you should consider instead.
ON24 (ONTF)
Forward P/S Ratio: 2.5x
Powering over 1,700 companies' virtual marketing efforts since 1998, ON24 (NYSE: ONTF) provides a cloud-based platform that enables businesses to create interactive digital experiences and capture actionable data from customer engagement.
Why Are We Out on ONTF?
- Offerings couldn’t generate interest over the last year as its billings have averaged 8.1% declines
- Sales are projected to tank by 5.1% over the next 12 months as its demand continues evaporating
- Suboptimal cost structure is highlighted by its history of operating margin losses
ON24 is trading at $7.93 per share, or 2.5x forward price-to-sales. Dive into our free research report to see why there are better opportunities than ONTF.
Chegg (CHGG)
Forward EV/EBITDA Ratio: 1.9x
Started as a physical textbook rental service, Chegg (NYSE: CHGG) is now a digital platform addressing student pain points by providing study and academic assistance.
Why Do We Think CHGG Will Underperform?
- Struggled with new customer acquisition as its services subscribers averaged 20.7% declines
- EBITDA margin declined by 15 percentage points over the last few years as its sales cratered
- Earnings per share decreased by more than its revenue over the last three years, showing each sale was less profitable
At $0.58 per share, Chegg trades at 1.9x forward EV/EBITDA. Read our free research report to see why you should think twice about including CHGG in your portfolio.
Sanmina (SANM)
Forward P/E Ratio: 13.4x
Founded in 1980, Sanmina (NASDAQ: SANM) is an electronics manufacturing services company offering end-to-end solutions for various industries.
Why Does SANM Worry Us?
- Annual revenue growth of 5% over the last two years was below our standards for the industrials sector
- Gross margin of 8.2% reflects its high production costs
- Eroding returns on capital suggest its historical profit centers are aging
Sanmina’s stock price of $145.81 implies a valuation ratio of 13.4x forward P/E. If you’re considering SANM for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Growth Stocks for this month. 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
