The Top 3 Value Traps Investors Should Avoid at All Costs
Value traps are companies that may seem cheap at first glance, but get progressively cheaper and cheaper until their stock destroys all the wealth investors can put into them. Such phenomena are quite common for companies that enduring considerable declines in their core operations, or are cooking their books to make their business look more attractive.
From a company that fabricated its financials, to another that's embroiled in insider trading controversy, to another that faces allegations that its technology is non-existent, the stocks all have one thing in common: having fallen from great heights and appearing deceptively undervalued. Let's look at why these companies are value traps and why investors should avoid them.
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Source Fool.com