Value Trap
A stock that has experienced a large price depreciation and is mistaken to be a value stock.
Investopedia Commentary
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.
Related Links
Guide to Stock-Picking Strategies
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See also: Fire Sale, Stock, Undervalued, Value Investing, Value Stock