3 Value Stocks We’re Skeptical Of

Value stocks typically trade at discounts to the broader market, offering patient investors the opportunity to buy businesses when they’re out of favor. The key risk, however, is that these stocks are usually cheap for a reason – five cents for a piece of fruit may seem like a great deal until you find out it’s rotten.

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.

State Street (STT)

Forward P/E Ratio: 11x

Dating back to 1792 when Boston's Long Wharf was the center of global shipping and trade, State Street (NYSE:STT) provides custody, investment management, and other financial services to institutional investors like pension funds, asset managers, and central banks worldwide.

Why Does STT Worry Us?

1. Sizable revenue base leads to growth challenges as its 3.6% annual revenue increases over the last five years fell short of other financials companies
2. Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 9.1% annually

State Street’s stock price of $125.50 implies a valuation ratio of 11x forward P/E. Check out our free in-depth research report to learn more about why STT doesn’t pass our bar.

Western Union (WU)

Forward P/E Ratio: 5.3x

With a history dating back to 1851 when it began as a telegraph company, Western Union (NYSE:WU) is a global money transfer service that enables consumers and businesses to send funds across borders and currencies, typically within minutes.

Why Do We Steer Clear of WU?

1. Sales tumbled by 2.9% annually over the last five years, showing market trends are working against its favor during this cycle
2. Earnings per share have dipped by 1.1% annually over the past five years, which is concerning because stock prices follow EPS over the long term

Western Union is trading at $9.15 per share, or 5.3x forward P/E. Dive into our free research report to see why there are better opportunities than WU.

First Financial Bancorp (FFBC)

Forward P/B Ratio: 1x

Tracing its roots back to 1863 during the Civil War era, First Financial Bancorp (NASDAQ:FFBC) is a bank holding company that provides commercial banking, lending, deposit services, and wealth management to individuals and businesses.

Why Does FFBC Give Us Pause?

1. Annual revenue growth of 2.5% over the last two years was below our standards for the banking sector
2. Annual net interest income growth of 6.4% over the last five years was below our standards for the banking sector
3. Performance over the past two years shows its incremental sales were less profitable as its earnings per share were flat

At $26.43 per share, First Financial Bancorp trades at 1x forward P/B. To fully understand why you should be careful with FFBC, check out our full research report (it’s free).

Stocks We Like More

Check out the high-quality names we’ve flagged in 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.