Value traps

“Spotting a cheap stock is something most investors could do with their eyes shut. Spotting a cheap stock that presents good value and can grow over time is not always so easy. Value traps, as they are so called, often appear to be cheap on the surface but don’t end up delivering strong capital returns. They may pay great dividends too but their fundamentals end up disappointing investors in the long run.

“For value-aligned investors like Hugh Selby-Smith and the team at Talaria Asset Management, it’s especially important to avoid these. And while Selby-Smith is keen to point out that growth traps are far more painful than value traps, the latter still sting hard.”

Recently, Hugh shared the Talaria team’s thoughts on the macro landscape, some of our top conviction calls, and how we avoid value traps.

Read the full article here