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.
Fresh Del Monte Produce (FDP)
Forward P/E Ratio: 13.3x
Translating to "of the mountain" in Spanish, Fresh Del Monte (NYSE: FDP) is a leader in providing high-quality, sustainably grown fresh fruits and vegetables.
Why Are We Out on FDP?
- Products fail to spark excitement with consumers, as seen in its flat sales over the last three years
- Projected sales decline of 2.9% for the next 12 months points to an even tougher demand environment ahead
- Commoditized products, bad unit economics, and high competition are reflected in its low gross margin of 8.2%
Fresh Del Monte Produce is trading at $36.94 per share, or 13.3x forward P/E. To fully understand why you should be careful with FDP, check out our full research report (it’s free for active Edge members).
Progyny (PGNY)
Forward P/E Ratio: 13.3x
Pioneering a data-driven approach to family building that has achieved an industry-leading patient satisfaction score of +80, Progyny (NASDAQ: PGNY) provides comprehensive fertility and family building benefits solutions to employers, helping employees access quality fertility treatments and support services.
Why Does PGNY Give Us Pause?
- Modest revenue base of $1.27 billion gives it less fixed cost leverage and fewer distribution channels than larger companies
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
At $24.03 per share, Progyny trades at 13.3x forward P/E. If you’re considering PGNY for your portfolio, see our FREE research report to learn more.
Kforce (KFRC)
Forward P/E Ratio: 13.9x
With nearly 60 years of matching skilled professionals with the right opportunities, Kforce (NYSE: KFRC) is a professional staffing company that specializes in placing technology and finance experts with businesses on both temporary and permanent bases.
Why Do We Pass on KFRC?
- Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last five years
- Earnings per share have contracted by 1.4% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Kforce’s stock price of $29.73 implies a valuation ratio of 13.9x forward P/E. Dive into our free research report to see why there are better opportunities than KFRC.
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 9 Market-Beating Stocks. 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
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
