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. Keeping that in mind, here are three value stocks with poor fundamentals and some alternatives you should consider instead.

Avantor (AVTR)

Forward P/E Ratio: 14.8x

With roots dating back to 1904 and embedded in virtually every stage of scientific research and production, Avantor (NYSE:AVTR) provides mission-critical products, materials, and services to customers in biopharma, healthcare, education, and advanced technology industries.

Why Do We Think Twice About AVTR?

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. Forecasted revenue decline of 2.1% for the upcoming 12 months implies demand will fall even further

3. Inability to adjust its cost structure while its revenue declined over the last two years led to a 3.6 percentage point drop in the company’s adjusted operating margin

At $16.17 per share, Avantor trades at 14.8x forward price-to-earnings. If you’re considering AVTR for your portfolio, see our FREE research report to learn more .

Carriage Services (CSV)

Forward P/E Ratio: 12.6x

Established in 1991, Carriage Services (NYSE:CSV) is a provider of funeral and cemetery services in the United States.

Why Are We Hesitant About CSV?

1. 4.5% annual revenue growth over the last two years was slower than its consumer discretionary peers

2. Anticipated sales growth of 7.2% for the next year implies demand will be shaky

3. Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its shrinking returns suggest its past profit sources are losing steam

Carriage Services is trading at $38.99 per share, or 12.6x forward price-to-earnings. To fully understand why you should be careful with CSV, check out our full research report (it’s free) .

HP (HPQ)

Forward P/E Ratio: 7.7x

Born from the legendary Silicon Valley garage startup founded by Bill Hewlett and Dave Packard in 1939, HP (NYSE:HPQ) designs and sells personal computers, printers, and related technology products and services to consumers, businesses, and enterprises worldwide.