With the markets a bit overheated after two years of 20%-plus gains, it is a good time to look for value stocks.
What are value stocks? Broadly, they are stocks that are trading below their intrinsic value, for whatever reason. It may be due to broader macro issues in their sector or industry, lack of exposure, mismanagement at the company, or some specific event that hurt the stock price, among many other reasons.
A good value stock is one that is poised to bounce back and be recognized for its value. A value trap is a cheap stock that is discounted for a reason and probably won’t amount to much anytime soon. To find a good value and avoid a value trap, here are five things that investors should look for.
This post appeared on Dynamic Wealth Report.