WARNING! These 7 Industries Will Seduce Investors Into Losing A Lot Of Money

Savita SubramanianSavita Subramanian

Photo: Bloomberg Television

All investors fear falling into the dreaded value trap, which is where stocks look cheap but they go nowhere or fall further.Bank of America’s Equity and Quant Strategy team led by Savita Subramanian screened the markets for industries trading at discounts to their historical price multiples, yet do not appear to offer any upside in price.

“Seven industries screened as Value Traps this month, with defensives (Staples and Pharma) and commodity-exposed industries (Metals & Mining and both Energy industries) dominating,” wrote Subramanian.

The team also named the names of stocks in the value-trap industries that were rated neutral or underperform by Bank of America’s analysts.

Beverages

Stocks To Avoid

  • Coca-Cola Enterprises
    (CCE)
  • Dr Pepper Snapple Group
    (DPS)
  • Molson Coors Brewing Co
    (TAP)

Source: Bank of America Merrill Lynch

Household Products

Stocks To Avoid

  • Clorox Co
    (CLX)

Source: Bank of America Merrill Lynch

Energy Equipment & Services

Stocks To Avoid

  • Diamond Offshore Drilling
    (DO)
  • FMC Technologies
    (FTI)
  • Rowan Companies
    (RDC)

Source: Bank of America Merrill Lynch

Oil Gas & Consumable Fuels

Stocks To Avoid

  • ConocoPhillips
    (COP)
  • Chevron Corp
    (CVX)
  • Devon Energy Corp
    (DVN)
  • EOG Resources
    (EOG)
  • Sunoco Inc
    (SUN)
  • Tesoro Corp
    (TSO)

Source: Bank of America Merrill Lynch

Pharmaceuticals

Stocks To Avoid

  • Abbott Laboratories
    (ABT)
  • Bristol-Myers Squibb
    (BMY)
  • Johnson & Johnson
    (JNJ)
  • Perrigo
    (PRGO)

Source: Bank of America Merrill Lynch

Airlines

Stocks To Avoid

  • Southwest Airlines Co
    (LUV)

Source: Bank of America Merrill Lynch

Metals & Mining

Stocks To Avoid

  • Alcoa Inc
    (AA)
  • Newmont Mining Corp
    (NEM)
  • United States Steel Corp
    (X)

Source: Bank of America Merrill Lynch

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