Fool Poll: Which Value Trap Should You Avoid?

By Katrina Chan
August 28, 2008 | Comments (1)

Recs

8

Over the past year, the S&P 500 has fallen more than 12%.

Doesn't sound like that much, but a deeper look through the index shows many companies that have taken quite a beating over the past year. Companies like Freddie Mac (NYSE: FRE), Washington Mutual (NYSE: WM), Fannie Mae (NYSE: FNM), and National City Corporation (NYSE: NCC) lead the pack of percentage losers, with their stock prices dropping anywhere from 82% to 93% over the past year. Now that's huge!

When stock prices fall, value investors come to feast. While some companies are worth looking at, my Foolish colleague Ilan Moscovitz lists three companies (which happen to be a part of the S&P 500) that he believes are value traps: Capital One Financial (NYSE: COF), Lehman Brothers (NYSE: LEH), and Merrill Lynch (NYSE: MER).

Are these three companies value traps or not? Vote in our poll below!

Take the Motley Poll

Which value trap should you avoid?

View Results

“Make Big Money With Options” Motley Fool CFO Ollen Douglass recently made over $100,000 buying options on 7 well known stocks. Now we’re committed to turning his small fortune into a massive one! And we want you to join us! Enter your email address to hear more:

Disagree? Then be sure to leave a comment with your thoughts and your write-in candidate for a value trap.

Fool Katrina Chan does not own shares of any of the companies mentioned and prefers to feast on the green grapes at her desk. The Motley Fool has a disclosure policy.

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Related Tickers

12/1/2009 1:50 PM
WAMUQ.PK $0.12 Up +0.01 +11.22%
Washington Mutual,… CAPS Rating: **
COF $38.14 Down -0.22 -0.57%
Capital One Financ… CAPS Rating: *
LEH $0.13 Down +0.00 +0.00%
Lehman Brothers Ho… CAPS Rating: *
FRE $1.07 Up +0.04 +3.88%
Freddie Mac CAPS Rating: *
MER $11.64 Down +0.00 +0.00%
Merrill Lynch & Co… CAPS Rating: *
NCC $1.81 Down +0.00 +0.00%
National City Corp CAPS Rating: *
FNM $0.92 Up +0.04 +4.32%
Fannie Mae CAPS Rating: *

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