A value trap stock will not see its share price increasing for an extended period of time. Some examples of value traps on Bursa over the last few years are Chin Teck Plantations , Focus Lumber, Evergreen Fibreboard, KSL Holdings and Keck Seng. Value traps are not exclusive to companies. The same principle can be applied to value traps on Bursa. Some of these value traps do have great embedded value but nothing has been done to grow this value sustainably and allow it to translate into actual healthy returns for shareholders.The firms should maybe seek new income streams, get into M&As or expand in a big way to new markets.

Source: The Star January 29, 2024 15:41 UTC