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. That said, here are two value stocks offering compelling risk-reward profiles and one climbing an uphill battle.
One Value Stock to Sell:
Viatris (VTRS)
Forward P/E Ratio: 6.5x
Created through the 2020 merger of Mylan and Pfizer's Upjohn division, Viatris (NASDAQ: VTRS) is a healthcare company that develops, manufactures, and distributes branded and generic medicines across more than 165 countries worldwide.
Why Do We Pass on VTRS?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 4.4% annually over the last two years
- Earnings per share fell by 13.2% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- Push for growth has led to negative returns on capital, signaling value destruction, and its decreasing returns suggest its historical profit centers are aging
At $15.58 per share, Viatris trades at 6.5x forward P/E. To fully understand why you should be careful with VTRS, check out our full research report (it’s free).
Two Value Stocks to Watch:
Freshworks (FRSH)
Forward P/S Ratio: 2.1x
Starting as a customer service solution before expanding into a comprehensive software suite, Freshworks (NASDAQ: FRSH) provides AI-powered software-as-a-service solutions that help companies manage customer service, IT support, sales, and marketing functions.
Why Could FRSH Be a Winner?
- Customers view its software as mission-critical to their operations as its ARR has averaged 17.8% growth over the last year
- Software is difficult to replicate at scale and leads to a top-tier gross margin of 85%
- Operating profits increased over the last year as the company gained some leverage on its fixed costs and became more efficient
Freshworks’s stock price of $7.26 implies a valuation ratio of 2.1x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
BellRing Brands (BRBR)
Forward P/E Ratio: 9.1x
Spun out of Post Holdings in 2019, Bellring Brands (NYSE: BRBR) offers protein shakes, nutrition bars, and other products under the PowerBar, Premier Protein, and Dymatize brands.
Why Are We Positive On BRBR?
- Products are selling at a rapid clip as its unit sales averaged an outstanding 17.8% growth rate over the past two years
- Free cash flow margin jumped by 4.7 percentage points over the last year, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures, and its returns are growing as it capitalizes on even better market opportunities
BellRing Brands is trading at $17.87 per share, or 9.1x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive 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 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
