All investors fear falling into the dreaded value trap, which is where stocks look cheap but they go nowhere or fall further.
Bank of America's Equity and Quant Strategy team led by Savita Subramanian screened the markets for industries trading at discounts to their historical price multiples, yet do not appear to offer any upside in price.
"Seven industries screened as Value Traps this month, with defensives (Staples and Pharma) and commodity-exposed industries (Metals & Mining and both Energy industries) dominating," wrote Subramanian.
The team also named the names of stocks in the value-trap industries that were rated neutral or underperform by Bank of America's analysts.
Beverages
Stocks To Avoid
- Coca-Cola Enterprises
(CCE) - Dr Pepper Snapple Group
(DPS) - Molson Coors Brewing Co
(TAP)
Source: Bank of America Merrill Lynch
Household Products
Stocks To Avoid
- Clorox Co
(CLX)
Source: Bank of America Merrill Lynch
Energy Equipment & Services
Stocks To Avoid
- Diamond Offshore Drilling
(DO) - FMC Technologies
(FTI) - Rowan Companies
(RDC)
Source: Bank of America Merrill Lynch
See the rest of the story at Business Insider
Please follow Money Game on Twitter and Facebook.
