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.
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 is one value stock trading at a big discount to its intrinsic value and two best left ignored.
Two Value Stocks to Sell:
NXP Semiconductors (NXPI)
Forward P/E Ratio: 16.4x
Spun off from Dutch electronics giant Philips in 2006, NXP Semiconductors (NASDAQ: NXPI) is a designer and manufacturer of chips used in autos, industrial manufacturing, mobile devices, and communications infrastructure.
Why Does NXPI Worry Us?
- Annual sales declines of 4.4% for the past two years show its products and services struggled to connect with the market during this cycle
- Free cash flow margin shrank by 10.1 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
At $227.45 per share, NXP Semiconductors trades at 16.4x forward P/E. Dive into our free research report to see why there are better opportunities than NXPI.
Alight (ALIT)
Forward P/E Ratio: 3.7x
Born from a corporate spinoff in 2017 to focus on employee experience technology, Alight (NYSE:ALIT) provides human capital management solutions that help companies administer employee benefits, payroll, and workforce management systems.
Why Should You Dump ALIT?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 3.1% annually over the last five years
- Earnings per share have dipped by 5% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Alight is trading at $2.19 per share, or 3.7x forward P/E. Check out our free in-depth research report to learn more about why ALIT doesn’t pass our bar.
One Value Stock to Watch:
Itron (ITRI)
Forward P/E Ratio: 14.6x
Founded by a small group of engineers who wanted to build a more efficient way to read utility meters, Itron (NASDAQ:ITRI) offers energy and water management products for the utility industry, municipalities, and industrial customers.
Why Do We Like ITRI?
- Operating margin improvement of 9.3 percentage points over the last five years demonstrates its ability to scale efficiently
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 46% over the last two years outstripped its revenue performance
- Free cash flow margin grew by 7.1 percentage points over the last five years, giving the company more chips to play with
Itron’s stock price of $98.17 implies a valuation ratio of 14.6x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free for active Edge members.
Stocks We Like Even More
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 6 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 Comfort Systems (+782% 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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