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.
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 three value stocks with poor fundamentals and some alternatives you should consider instead.
ANI Pharmaceuticals (ANIP)
Forward P/E Ratio: 10.9x
With a diverse portfolio of 116 pharmaceutical products and a growing rare disease platform, ANI Pharmaceuticals (NASDAQ:ANIP) develops, manufactures, and markets branded and generic prescription pharmaceuticals, with a focus on rare disease treatments.
Why Is ANIP Not Exciting?
- Subscale operations are evident in its revenue base of $826.9 million, meaning it has fewer distribution channels than its larger rivals
- Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 4.5 percentage points
- Push for growth has led to negative returns on capital, signaling value destruction
ANI Pharmaceuticals’s stock price of $85.75 implies a valuation ratio of 10.9x forward P/E. Check out our free in-depth research report to learn more about why ANIP doesn’t pass our bar.
Invesco (IVZ)
Forward P/E Ratio: 11.9x
With roots dating back to 1935 when it pioneered the first mutual fund with an objective of capital growth, Invesco (NYSE:IVZ) is a global asset management firm that offers investment solutions across equities, fixed income, alternatives, and multi-asset strategies.
Why Do We Pass on IVZ?
- Sales were flat over the last five years, indicating it’s failed to expand this cycle
- Flat earnings per share over the last five years lagged its peers
- ROE of 5.8% reflects management’s challenges in identifying attractive investment opportunities
At $27.94 per share, Invesco trades at 11.9x forward P/E. To fully understand why you should be careful with IVZ, check out our full research report (it’s free).
Everest Group (EG)
Forward P/B Ratio: 0.8x
Rebranded from Everest Re in 2023 to reflect its evolution beyond just reinsurance, Everest Group (NYSE:EG) underwrites property and casualty reinsurance and insurance worldwide, serving insurance companies, corporations, and other clients across six continents.
Why Does EG Fall Short?
- Forecasted revenue decline of 2.5% for the upcoming 12 months implies demand will fall off a cliff
- Operational productivity has decreased over the last two years as its combined ratio worsened by 17.9 percentage points
- Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 50.5% annually
Everest Group is trading at $319.97 per share, or 0.8x forward P/B. If you’re considering EG for your portfolio, see our FREE research report to learn more.
Stocks We Like More
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 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.