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.
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. Keeping that in mind, here are two value stocks trading at big discounts to their intrinsic values and one with little support.
One Value Stock to Sell:
CDW (CDW)
Forward P/E Ratio: 10.5x
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 Worry Us?
- Annual sales growth of 3.9% over the last five years lagged behind its business services peers as its large revenue base made it difficult to generate incremental demand
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 2.6%
- Incremental sales over the last two years were less profitable as its 2% annual earnings per share growth lagged its revenue gains
CDW is trading at $116.86 per share, or 10.5x forward P/E. To fully understand why you should be careful with CDW, check out our full research report (it’s free).
Two Value Stocks to Watch:
CarGurus (CARG)
Forward EV/EBITDA Ratio: 8.4x
Bringing transparency to a sometimes opaque process, CarGurus (NASDAQ:CARG) is a digital marketplace where auto dealers can connect with potential customers and where car buyers can browse, purchase, and obtain financing.
Why Do We Like CARG?
- Platform is difficult to replicate at scale and results in a best-in-class gross margin of 88.4%
- Earnings per share grew by 32.5% annually over the last three years and trumped its peers
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its improved cash conversion implies it’s becoming a less capital-intensive business
CarGurus’s stock price of $29.85 implies a valuation ratio of 8.4x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.
Crescent Energy (CRGY)
Forward P/E Ratio: 4.5x
Controlling over 1.4 million net acres across proven U.S. basins, Crescent Energy (NYSE:CRGY) extracts oil and natural gas from underground reservoirs in Texas and the Rocky Mountains.
Why Do We Love CRGY?
- Annual revenue growth of 41.5% over the last five years was superb and indicates its market share increased during this cycle
- Excellent production efficiency leads to a stellar gross margin of 59%
- CRGY is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
At $11.88 per share, Crescent Energy trades at 4.5x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
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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.