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.
Identifying genuine bargains from value traps is something many investors struggle with, which is why we started StockStory - to help you find the best companies. That said, here are two value stocks offering compelling risk-reward profiles and one best left ignored.
One Value Stock to Sell:
Oaktree Specialty Lending (OCSL)
Forward P/E Ratio: 8.7x
Managed by Oaktree Capital Management, one of the world's premier alternative investment firms, Oaktree Specialty Lending (NASDAQ: OCSL) is a business development company that provides customized financing solutions to mid-market companies across various industries.
Why Is OCSL Risky?
- Annual sales declines of 12.4% for the past two years show its products and services struggled to connect with the market during this cycle
- Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
- Annual tangible book value per share declines of 4.5% for the past five years show its capital management struggled during this cycle
Oaktree Specialty Lending is trading at $12.95 per share, or 8.7x forward P/E. Check out our free in-depth research report to learn more about why OCSL doesn’t pass our bar.
Two Value Stocks to Watch:
Pfizer (PFE)
Forward P/E Ratio: 9.2x
With roots dating back to 1849 when two German immigrants opened a fine chemicals business in Brooklyn, Pfizer (NYSE: PFE) is a global biopharmaceutical company that discovers, develops, manufactures, and sells medicines and vaccines for a wide range of diseases and conditions.
Why Does PFE Stand Out?
- Existing business lines can expand without risky acquisitions as its organic revenue growth averaged 10.1% over the past two years
- Dominant market position is represented by its $62.58 billion in revenue, which creates significant barriers to entry in this highly regulated industry
- Adjusted operating margin expanded by 17.8 percentage points over the last two years as it scaled and became more efficient
At $27.24 per share, Pfizer trades at 9.2x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Hewlett Packard Enterprise (HPE)
Forward P/E Ratio: 10.3x
Born from the 2015 split of the iconic Silicon Valley pioneer Hewlett-Packard, Hewlett Packard Enterprise (NYSE: HPE) provides edge-to-cloud technology solutions that help businesses capture, analyze, and act upon their data across hybrid IT environments.
Why Are We Fans of HPE?
- ARR trends over the past two years show it’s maintaining a steady flow of long-term contracts that contribute positively to its revenue predictability
- Massive revenue base of $35.74 billion makes it a well-known name that influences purchasing decisions
- Market share is on track to rise over the next 12 months as its 16.6% projected revenue growth implies demand will accelerate from its two-year trend
Hewlett Packard Enterprise’s stock price of $25.88 implies a valuation ratio of 10.3x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
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.
