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Dividend Titan

Not all cheap stocks are a bargain

Published 22 days ago • 1 min read

Not all cheap stocks are a bargain.

I know, with the recent tariff sell-off, there's an abundance of investment opportunities. Diligence members know I've been accumulating too.

However, as the trade war continues to evolve, I'd be careful of catching falling knives, or what I call "value traps".

I spoke with CNA Money Mind on TV, shared some of my thoughts on a value trap:

  • Cheap valuations but weak fundamentals: stocks may look like a bargain, but underlying business has weak earnings power, or management has lost their way.
  • Companies with rising, unsustainable leverage: Companies continue to pile on debt and not addressing their deteriorating financial position.
  • Declining business models: Outdated products and services, competing in a highly intense industry with little economic moat.
  • Shrinking free cash flow: Company experiencing falling revenues and net profits, leading to a fall in free cash flow

So... if you want to build passive income and take advantage of the market sell-off, you might want to watch this:

​Click HERE to watch Tariff Turmoil​

Sometimes, investing can be simple.

Willie Keng, CFA

Founder, dividendtitan.com

P.S. Like this issue? Click HERE to join 5k+ investors reading my DT Compound Letter. I send my letters to your inbox every Sunday.

Dividend Titan

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