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.

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. That said, here are three value stocks climbing an uphill battle and some other investments you should look into instead.

Centene (CNC)

Forward P/E Ratio: 14.1x

Serving nearly 1 in 15 Americans through its government healthcare programs, Centene (NYSE: CNC) is a healthcare company that manages government-sponsored health insurance programs like Medicaid and Medicare for low-income and complex-needs populations.

Why Do We Think Twice About CNC?

1. Underwhelming customer growth over the past two years shows the company faced challenges in winning new contracts
2. Earnings per share fell by 16.3% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

At $44.41 per share, Centene trades at 14.1x forward P/E. If you’re considering CNC for your portfolio, see our FREE research report to learn more.

Unum Group (UNM)

Forward P/B Ratio: 1x

Tracing its roots back to 1848 when financial security for workers was virtually non-existent, Unum Group (NYSE: UNM) provides workplace financial protection benefits including disability, life, accident, critical illness, dental and vision insurance primarily through employers.

Why Should You Dump UNM?

1. Outsized scale creates growth headwinds as its 2.9% annualized net premiums earned increases over the last five years underperformed other financial institutions
2. Estimated sales decline of 4.5% for the next 12 months implies a challenging demand environment
3. Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 3% annually

Unum Group is trading at $72.50 per share, or 1x forward P/B. Dive into our free research report to see why there are better opportunities than UNM.

Ellington Financial (EFC)

Forward P/B Ratio: 0.9x

Operating under the guidance of Ellington Management Group, a respected name in structured credit markets, Ellington Financial (NYSE: EFC) acquires and manages a diverse portfolio of mortgage-related, consumer-related, and other financial assets to generate returns for investors.

Why Do We Pass on EFC?

1. Annual earnings per share growth of 2.7% underperformed its revenue over the last five years, showing its incremental sales were less profitable
2. Products and services are facing significant credit quality challenges during this cycle as tangible book value per share has declined by 5.6% annually over the last five years
3. ROE of 6.6% reflects management’s challenges in identifying attractive investment opportunities

Ellington Financial’s stock price of $12.50 implies a valuation ratio of 0.9x forward P/B. Read our free research report to see why you should think twice about including EFC in your portfolio.

Stocks We Like More

WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.