6 Signs of Value Traps in Stocks
Channel: Value Investing with Sven Carlin, Ph.D.
Date: 13/07/2017

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A value trap is a stock that looks good because it is cheap and therefore attractive to the value investor. However, it might be cheap for a good reason or many good reasons. Looking at future catalysts, insider activity, analyzing the sector, analyzing the balance sheet, checking the sustainability of the dividend helps in determining whether an investment is a value trap or not, thus lower our investing risks and increase our returns. Investing mistakes can never be avoided but the limiting of them helps in increasing portfolio returns.