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.
Identifying genuine bargains from value traps is something many investors struggle with, which is why we started StockStory - to help you find the best companies. Keeping that in mind, here is one value stock trading at a big discount to its intrinsic value and two with little support.
Two Value Stocks to Sell:
Mattel (MAT)
Forward P/E Ratio: 12.8x
Known for the creation of iconic toys such as Barbie and Hotwheels, Mattel (NASDAQ: MAT) is a global children's entertainment company specializing in the design and production of consumer products.
Why Do We Think MAT Will Underperform?
- Sales trends were unexciting over the last five years as its 3.1% annual growth was below the typical consumer discretionary company
- Low free cash flow margin of 9.4% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
At $16.13 per share, Mattel trades at 12.8x forward P/E. Dive into our free research report to see why there are better opportunities than MAT.
Ingredion (INGR)
Forward P/E Ratio: 9.9x
Known for its ability to turn ordinary corn into thousands of different food ingredients, Ingredion (NYSE: INGR) transforms grains, fruits, vegetables and other plant-based materials into specialty starches, sweeteners and other ingredients for food, beverage and industrial markets.
Why Is INGR Not Exciting?
- Annual sales declines of 3.1% for the past three years show its products struggled to connect with the market
- Anticipated sales growth of 2% for the next year implies demand will be shaky
- Free cash flow margin shrank by 8.3 percentage points over the last year, suggesting the company is consuming more capital to stay competitive
Ingredion is trading at $108.84 per share, or 9.9x forward P/E. If you’re considering INGR for your portfolio, see our FREE research report to learn more.
One Value Stock to Buy:
EXL (EXLS)
Forward P/E Ratio: 14.1x
Originally founded as an outsourcing company in 1999 before evolving into a technology-focused enterprise, EXL (NASDAQ: EXLS) provides data analytics and AI-powered digital operations solutions that help businesses transform their operations and make better decisions.
Why Is EXLS a Top Pick?
- Impressive 16.8% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Share buybacks catapulted its annual earnings per share growth to 22.6%, which outperformed its revenue gains over the last five years
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
EXL’s stock price of $30.57 implies a valuation ratio of 14.1x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it's flagging for this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
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.
