Value traps: Nine cheap stocks to avoid

Even on low PERs and high yields, some stocks are cheap for a reason. John Addis points out nine stocks with dangerously seductive figures.

How’s this for an investment proposition: A stock yielding 9.3%, sporting a PER of 10 times (downgraded) earnings. Moreover, department store Myer is ‘making less profit than it should,' according to Steve Johnson of Forager Funds, with historically low margins of just 2.4%. Is the market underestimating the company’s turnaround potential?


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