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 climbing an uphill battle and some other investments you should look into instead.
Kimberly-Clark (KMB)
Forward P/E Ratio: 13.4x
Originally founded as a Wisconsin paper mill in 1872, Kimberly-Clark (NYSE: KMB) is now a household products powerhouse known for personal care and tissue products.
Why Are We Wary of KMB?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 2.1%
- 6.3 percentage point decline in its free cash flow margin over the last year reflects the company’s increased investments to defend its market position
Kimberly-Clark is trading at $103.61 per share, or 13.4x forward P/E. To fully understand why you should be careful with KMB, check out our full research report (it’s free for active Edge members).
Oshkosh (OSK)
Forward P/E Ratio: 10.8x
Oshkosh (NYSE: OSK) manufactures specialty vehicles for the defense, fire, emergency, and commercial industry, operating various brand subsidiaries within each industry.
Why Is OSK Not Exciting?
- Backlog has dropped by 1.9% on average over the past two years, suggesting it’s losing orders as competition picks up
- Gross margin of 16.5% is below its competitors, leaving less money to invest in areas like marketing and R&D
- 7 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
At $121.51 per share, Oshkosh trades at 10.8x forward P/E. Check out our free in-depth research report to learn more about why OSK doesn’t pass our bar.
Peoples Bancorp (PEBO)
Forward P/B Ratio: 0.9x
Founded in 1902 in Ohio and expanding through both organic growth and acquisitions, Peoples Bancorp (NASDAQ: PEBO) is a financial holding company that provides banking, insurance, equipment leasing, and investment services to consumers and businesses.
Why Do We Think Twice About PEBO?
- Estimated net interest income growth of 2.7% for the next 12 months implies demand will slow from its five-year trend
- Net interest margin dropped by 44.7 basis points (100 basis points = 1 percentage point) over the last two years, implying the firm’s loan book profitability fell as competitors entered the market
- Earnings per share fell by 13.5% annually over the last two years while its revenue grew, showing its incremental sales were much less profitable
Peoples Bancorp’s stock price of $28.56 implies a valuation ratio of 0.9x forward P/B. Dive into our free research report to see why there are better opportunities than PEBO.
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 Tecnoglass (+1,754% 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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