1 Value Stock on Our Buy List and 2 Facing Challenges

Value investing has created more billionaires than any other strategy, like Warren Buffett, who built his fortune 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 is one value stock offering a compelling risk-reward profile and two best left ignored.

Forward P/E Ratio: 9.2x

Standing out with its digital keyless entry into self-storage room technology, Janus (NYSE:JBI) is a provider of easily accessible self-storage solutions.

Why Does JBI Give Us Pause?

1. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth

2. Projected sales decline of 1.2% over the next 12 months indicates demand will continue deteriorating

3. Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term

Janus’s stock price of $5.83 implies a valuation ratio of 9.2x forward P/E. Dive into our free research report to see why there are better opportunities than JBI.

Forward P/E Ratio: 7x

Formerly known as Alliance Data Systems until its 2022 rebranding, Bread Financial (NYSE:BFH) provides credit cards, installment loans, and savings products to consumers while powering branded payment solutions for retailers and merchants.

Why Are We Out on BFH?

1. Sales tumbled by 6.1% annually over the last two years, showing market trends are working against its favor during this cycle

2. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term

At $61.67 per share, Bread Financial trades at 7x forward P/E. Read our free research report to see why you should think twice about including BFH in your portfolio, it’s free for active Edge members.

Forward P/E Ratio: 10.7x

Founded in 1894 and spun off from American Express in 2005, Ameriprise Financial (NYSE:AMP) provides financial planning, wealth management, asset management, and insurance products to help individuals and institutions achieve their financial goals.

Why Are We Backing AMP?

1. Share repurchases over the last five years enabled its annual earnings per share growth of 22.5% to outpace its revenue gains

2. Impressive 35.5% annual tangible book value per share growth over the last two years indicates it’s building equity value this cycle

3. Stellar return on equity showcases management’s ability to surface highly profitable business ventures