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.
This distinction between true value and value traps can challenge even the most skilled investors. Luckily for you, we started StockStory to help you uncover exceptional companies. That said, here is one value stock trading at a big discount to its intrinsic value and two best left ignored.
Two Value Stocks to Sell:
Bath and Body Works (BBWI)
Forward P/E Ratio: 7.4x
Spun off from L Brands in 2020, Bath & Body Works (NYSE: BBWI) is a personal care and home fragrance retailer where consumers can find specialty shower gels, scented candles for the home, and lotions.
Why Does BBWI Give Us Pause?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Estimated sales growth of 2.6% for the next 12 months implies demand will slow from its six-year trend
- Earnings per share lagged its peers over the last six years as they only grew by 8.5% annually
Bath and Body Works’s stock price of $26.48 implies a valuation ratio of 7.4x forward P/E. If you’re considering BBWI for your portfolio, see our FREE research report to learn more.
BJ's (BJRI)
Forward P/E Ratio: 14.3x
Founded in 1978 in California, BJ’s Restaurants (NASDAQ: BJRI) is a chain of restaurants whose menu features classic American dishes, often with a twist.
Why Do We Think BJRI Will Underperform?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience
- Gross margin of 14.7% is below its competitors, leaving less money for marketing and promotions
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
At $30.27 per share, BJ's trades at 14.3x forward P/E. Read our free research report to see why you should think twice about including BJRI in your portfolio.
One Value Stock to Watch:
Bank OZK (OZK)
Forward P/B Ratio: 1x
Founded in 1903 and rebranded from Bank of the Ozarks in 2018, Bank OZK (NASDAQ: OZK) is a commercial bank that specializes in real estate lending while offering a full range of banking services to individuals and businesses.
Why Are We Fans of OZK?
- Annual net interest income growth of 12.6% over the last five years was superb and indicates its market share increased during this cycle
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 7.8% annually
- Balance sheet strength has increased this cycle as its 10.5% annual tangible book value per share growth over the last five years was exceptional
Bank OZK is trading at $52.05 per share, or 1x forward P/B. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at 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 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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
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