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3 Value Stocks with Warning Signs

USNA Cover Image

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.

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. Keeping that in mind, here are three value stocks with little support and some other investments you should consider instead.

USANA (USNA)

Forward P/E Ratio: 12.4x

Going to market with a direct selling model rather than through traditional retailers, USANA Health Sciences (NYSE: USNA) manufactures and sells nutritional, personal care, and skincare products.

Why Are We Hesitant About USNA?

  1. Products aren't resonating with the market as its revenue declined by 4.2% annually over the last three years
  2. Subscale operations are evident in its revenue base of $912.7 million, meaning it has fewer distribution channels than its larger rivals
  3. Performance over the past three years shows each sale was less profitable as its earnings per share dropped by 20.9% annually, worse than its revenue

At $21.96 per share, USANA trades at 12.4x forward P/E. If you’re considering USNA for your portfolio, see our FREE research report to learn more.

Park-Ohio (PKOH)

Forward P/E Ratio: 7.3x

Based in Cleveland, Park-Ohio (NASDAQ: PKOH) provides supply chain management services, capital equipment, and manufactured components.

Why Do We Steer Clear of PKOH?

  1. Customers postponed purchases of its products and services this cycle as its revenue declined by 1.8% annually over the last two years
  2. Gross margin of 15.5% reflects its high production costs
  3. Negative free cash flow raises questions about the return timeline for its investments

Park-Ohio is trading at $22.24 per share, or 7.3x forward P/E. Dive into our free research report to see why there are better opportunities than PKOH.

CDW (CDW)

Forward P/E Ratio: 12.5x

Serving as a crucial bridge between technology manufacturers and end users since 1984, CDW (NASDAQ: CDW) is a multi-brand provider of information technology solutions that helps businesses and public sector organizations select, implement, and manage hardware, software, and IT services.

Why Does CDW Fall Short?

  1. Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last two years
  2. Projected sales growth of 1.6% for the next 12 months suggests sluggish demand
  3. Flat earnings per share over the last two years lagged its peers

CDW’s stock price of $125.80 implies a valuation ratio of 12.5x forward P/E. To fully understand why you should be careful with CDW, check out our full research report (it’s free).

High-Quality Stocks for All Market Conditions

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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.

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