The title of this article may generate strong responses from some, who will reply: “never!” And indeed, if a value trap is defined as a stock that is not a value, then clearly a value trap is never a value. (There aren’t many rich dialetheists on Wall Street.) But let’s take a more nuanced view of a value trap and follow Investopedia.com in defining a value trap, which I quote at some length:
A value trap is a stock that appears to be cheap because the stock has been trading at low multiples of earnings, cash flow or book value for an extended time period. Value....More>>>