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.

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. That said, here are three value stocks with little support and some other investments you should consider instead.

Micron (MU)

Forward P/E Ratio: 10.7x

Founded in the basement of a Boise, Idaho dental office in 1978, Micron (NYSE:MU) is a leading provider of memory chips used in thousands of devices across mobile, data centers, industrial, consumer, and automotive markets.

Why Does MU Worry Us?

1. Gross margin of 21.8% is below its competitors, leaving less money to invest in areas like marketing and R&D
2. Responsiveness to unforeseen market trends is restricted due to its substandard operating profitability
3. Cash-burning history makes us doubt the long-term viability of its business model

Micron’s stock price of $93.18 implies a valuation ratio of 10.7x forward P/E. Read our free research report to see why you should think twice about including MU in your portfolio, it’s free.

Fastly (FSLY)

Forward P/S Ratio: 1.7x

Founded in 2011, Fastly (NYSE:FSLY) provides content delivery and edge cloud computing services, enabling enterprises and developers to deliver fast, secure, and scalable digital content and experiences.

Why Is FSLY Risky?

1. Revenue increased by 14.3% annually over the last three years, acceptable on an absolute basis but tepid for a software company enjoying secular tailwinds
2. Bad unit economics and steep infrastructure costs are reflected in its gross margin of 54%, one of the worst among software companies
3. Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders

At $7.19 per share, Fastly trades at 1.7x forward price-to-sales. Dive into our free research report to see why there are better opportunities than FSLY.

ePlus (PLUS)

Forward P/E Ratio: 14.6x

Starting as a financing company in 1990 before evolving into a full-service technology provider, ePlus (NASDAQ:PLUS) provides comprehensive IT solutions, professional services, and financing options to help organizations optimize their technology infrastructure and supply chain processes.

Why Do We Pass on PLUS?

1. Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last two years
2. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
3. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

ePlus is trading at $66.97 per share, or 14.6x forward P/E. To fully understand why you should be careful with PLUS, check out our full research report (it’s free).

High-Quality Stocks for All Market Conditions

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our 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.