Value Trap

What does it Mean? A stock that has experienced a large price depreciation and is mistaken to be a value stock.
Investopedia Says... When a company's stock seems undervalued,  investors are sometimes drawn into purchasing it in hopes of a stock price appreciation. If stock price is the only factor an investor looks at before buying a stock, he or she could end up with a stock whose value is likely to decline even further.

Terms Related Links

Fire Sale
Stock
Undervalued
Value Investing
Value Stock

Terms Related Links
Value Traps: Bargain Hunters Beware! - Find out how to avoid getting sucked in by a deceiving bargain stock.

Value Investing + Relative Strength = Higher Returns - Buying value stocks that are moving higher helps investors steer clear of value traps.

Value Investing Using The Enterprise Multiple - This simple measure can help investors determine whether a stock is a good deal.

Use Price-To-Sales Ratios To Value Stocks - Take a look at how this effective ratio can be influenced by certain critical factors.

Warren Buffett: How He Does It - We look at the Sage of Omaha's methodology for evaluating value stocks.

Guide to Stock-Picking Strategies - There are many ways to make money, knowing how to choose the best stocks is one of them.

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