Avoid These 2 Overvalued Investments

In today's edition of MarketFoolery, host Chris Hill and analysts Bryan Hinmon and Jeff Fischer look at two stocks they believe are overvalued today: Gap (NYSE: GPS  ) and Open Text (Nasdaq: OTEX  ) .

Bryan believes that while Gap has done a lot of things right recently, the retail space isn't hospitable for the company today. Gap just doesn't seem to have the same brand cachet it used to, and Bryan looks at one very telling stat that illustrates its slip in brand strength.

Jeff looks at a $50 put option on Open Text, which he finds to be too expensive today. Because Jeff believes the company remains undervalued at today's prices, put options are by nature overvalued.

Just because Gap isn't a great buy today, that doesn't mean the retail space is void of opportunity.

In fact, the retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of last century. Only those most forward-looking and capable companies will survive, and they'll handsomely reward investors who understand the landscape. You can read about the 3 Companies Ready to Rule Retail in our special report. Uncovering these top picks is free today; just click here to read more.

Bryan Hinmon, CFA, and Chris Hill have no positions in the stocks mentioned above. Jeff Fischer owns shares of Open Text. The Motley Fool owns shares of Gap and Open Text and is short Open Text. Motley Fool newsletter services recommend Gap and Open Text. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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