Value Trap

Value Trap

A stock with a lower-than-usual price that appears to be a value stock but is not. A value trap appears to be undervalued at first glance but its fundamentals are unhealthy and the stock is unlikely to recover in price. One may fall into a value trap by looking only at the stock's price but not at any other financial information.
References in periodicals archive ?
He sees the stock as a "value trap" until material changes are taken.
But sometimes cheap assets remain cheap for a really long time (the so-called value trap).
Walsh agreed it might be a "value trap" but noted that they are long-term investors and are "paid to wait." She pointed out the stock was up 71% year to date.
Asian equities could well prove a value trap in 2016.
D on't lose money when investing by falling into a value trap. A stock is a value trap if it looks like a great buy but isn't.
But Tesco has all the hallmarks of a classic "value trap".
A steeper US Treasury yield curve, of course, is gold negative and even $1600 is a value trap. As growth momentum rises, as tail risk fears recede, as correlations continue to fall, the outperformance of emerging markets and Japan's Nikkei becomes all the more compelling.
inevitable, creating a value trap," said Discern Inc analyst Cindy Shaw.
During market downturns many stocks can be cheap, but if there is no future growth potential, than that stock could be considered a value trap. If a company is inexpensive and growing (and our earnings projections for it look good), then there can be a good case to invest.
We think it's vital to avoid the value trap: when you have dead money that's going nowhere."
"We see HMV as a value trap with potentially insurmountable structural issues," she added.
It is also clear that even if there is a transfer, the transfer for value trap will not be triggered if there is no consideration given for that transfer.