The low valuation multiples for value stocks provide a margin of safety that growth stocks rarely offer. However, the challenge lies in determining whether these cheap assets are genuinely undervalued or simply on sale due to their potentially deteriorating business models.

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. Keeping that in mind, here are three value stocks with little support and some other investments you should consider instead.

Timken (TKR)

Forward P/E Ratio: 11.8x

Established after the founder noticed the difficulty freight wagons had making sharp turns, Timken (NYSE:TKR) is a provider of industrial parts used across various sectors.

Why Do We Think TKR Will Underperform?

1. Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy

2. Performance over the past two years shows each sale was less profitable, as its earnings per share fell by 2.9% annually

3. Free cash flow margin shrank by 6.3 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

At $75.23 per share, Timken trades at 11.8x forward price-to-earnings. To fully understand why you should be careful with TKR, check out our full research report (it’s free) .

Taylor Morrison Home (TMHC)

Forward P/E Ratio: 6.8x

Named “America’s Most Trusted Home Builder” in 2019, Taylor Morrison Home (NYSE:TMHC) builds single family homes and communities across the United States.

Why Does TMHC Fall Short?

1. Product roadmap and go-to-market strategy need to be reconsidered as its backlog has averaged 14.4% declines over the past 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. Free cash flow margin dropped by 15.6 percentage points over the last five years, implying the company became more capital intensive as competition picked up

Taylor Morrison Home is trading at $61.15 per share, or 6.8x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than TMHC .

Concentrix (CNXC)

Forward P/E Ratio: 3.8x

With a team of approximately 450,000 "game-changers" across 75 countries, Concentrix (NASDAQ:CNXC) designs and delivers customer experience solutions that help global brands manage customer interactions across digital channels and contact centers.