The volatile market environment has provided investors the opportunity to buy some stocks at discounts, Jim Cramer said on CNBC's "Mad Money." After all, quality stocks are sometimes brought down with the overall market when they should probably be trading at higher levels, Cramer said. Investors should be careful, though.
"There are other stocks that have sold off for a very different reason: because they deserve to go lower. These stocks are dangerous," Cramer said. "They lure you in with apparently low valuations that seem cheap, and then they lose you boatloads of money because they aren't really cheap— they're what we call value traps that have a long way to fall before they can find a bottom."
Cramer put together a list of potential value traps. He recommends investors stay away from these stocks for at least one quarter, meaning that before investors even consider buying these stocks again, they should wait for the underlying companies to report earnings. That way, investors can best gauge whether the underlying companies can turn things around.
Read on for Cramer's stocks to avoid.
By Drew Sandholm With Reuters
Posted 11 June 2012
When this story was published, Cramer's charitable trust owned Apple.
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