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. Keeping that in mind, here are two value stocks offering compelling risk-reward profiles and one best left ignored.

One Value Stock to Sell:

Lincoln Financial Group (LNC)

Forward P/B Ratio: 0.9x

Founded in 1905 by a group of Fort Wayne, Indiana businessmen who named the company after Abraham Lincoln, Lincoln National Corporation (NYSE: LNC) provides insurance, retirement plans, and wealth management products through its subsidiaries, operating under four main segments: Annuities, Life Insurance, Group Protection, and Retirement Plan Services.

Why Are We Out on LNC?

1. Sales stagnated over the last two years and signal the need for new growth strategies
2. Insurance offerings faced market headwinds this cycle, reflected in stagnant net premiums earned over the last five years
3. Book value per share tumbled by 14.9% annually over the last five years, showing insurance sector trends are working against its favor during this cycle

Lincoln Financial Group is trading at $42.30 per share, or 0.9x forward P/B. To fully understand why you should be careful with LNC, check out our full research report (it’s free for active Edge members).

Two Value Stocks to Watch:

BGC (BGC)

Forward P/E Ratio: 7.1x

Tracing its roots back to 1945 and named after founder Bernard Gerald Cantor, BGC Group (NASDAQ: BGC) operates a global brokerage and financial technology platform that facilitates trading across fixed income, foreign exchange, equities, energy, and commodities markets.

Why Could BGC Be a Winner?

1. Annual revenue growth of 16.8% over the past two years was outstanding, reflecting market share gains this cycle
2. Performance over the past two years shows its incremental sales were more profitable, as its annual earnings per share growth of 21.7% outpaced its revenue gains
3. Management team has demonstrated it can invest in profitable ventures through its 10.9% five-year return on equity

BGC’s stock price of $9.14 implies a valuation ratio of 7.1x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.

Byline Bancorp (BY)

Forward P/B Ratio: 1x

Ranking as the fifth most active Small Business Administration lender in the country, Byline Bancorp (NYSE: BY) is a Chicago-based bank that provides banking services to small and medium-sized businesses, commercial real estate developers, and consumers.

Why Are We Positive On BY?

1. Market share has increased this cycle as its 12.3% annual net interest income growth over the last five years was exceptional
2. Performance over the past five years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 21.8% outpaced its revenue gains
3. Annual tangible book value per share growth of 17.5% over the last two years was superb and indicates its capital strength increased during this cycle

At $27.26 per share, Byline Bancorp trades at 1x forward P/B. Is now a good time to buy? See for yourself in our full research report, it’s free for active Edge members.

Stocks We Like Even More

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - 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 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 Exlservice (+354% 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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