No matter what the market circumstances are, everybody wants to get a deal if they could find one. The problem today is seeking out viable undervalued stocks. Seemingly, everything has gone to the moon — which is one indicator that perhaps everything isn’t all that well.

To be fair, there are some undervalued stocks that are genuinely great companies that are temporarily stuck in the muck. This isn’t an article about that topic. Instead, we’ll be looking at companies that are considered great value — either by fundamental indicators or because current pricing doesn’t reflect future upside — but may be potential bull traps.

Before you get too upset, please note that I’m not suggesting that these undervalued stocks are investments to short. Rather, I think it’s fair to say that speculation has gotten out of hand. Therefore, you may want another perspective on these underlying companies before you go too crazy. My best argument for caution is this chart below:

Here, we have the personal saving rate (on an average annualized basis) stacked up against the Dow Jones from 1959 through 2020. The biggest takeaway is that these two metrics share an inverse relationship — as one goes up, the other generally goes down. In fact, I calculated a -66.3% correlation coefficient from 1959 to 2019.

Why stop at 2019? If I include 2020 data, suddenly, the inverse correlation becomes less significant at -46.6%. This tells you that we’ve never seen such a dramatic rise in the personal saving rate, which is deflationary as more people are saving money. Yet the equities market is rising higher, which doesn’t make sense from a historical and logical perspective. That’s why I believe these undervalued stocks are not necessarily a good deal.

• General Electric (NYSE:GE)
• Apple (NASDAQ:AAPL)
• Tesla (NASDAQ:TSLA)
• Volkswagen (OTCMKTS:VWAGY)
• Carnival (NYSE:CCL)
• Toll Brothers (NYSE:TOL)
• Kohl’s (NYSE:KSS)

Let me caveat this entire article by acknowledging that I could be dead wrong about this. However, this may be a time to at least consider that deflation, not inflation is our biggest fear. If people don’t want to spend money — and that’s what a personal saving rate of 16% in 2020 implies — then it doesn’t matter what yields do. And this might force a rethink on so-called undervalued stocks.

Undervalued Stocks: General Electric (GE)

General Electric isn’t exactly what I would call hurting. Over the trailing year, GE stock has gained over 116%. On a year-to-date basis, shares have moved up over 26%. So, why is this on a list of undervalued stocks that are “hurting” for a reason?

Fundamentally, the company has a long way to go before convincing stakeholders to take a gander. In the quarter ended Dec. 31, 2020, General Electric rang up $21.9 billion in revenue, which was down 16.4% from the year-ago quarter. Now, the hope among contrarian bulls is that as the economy reopens, the company will gain its footing through increased projects and revenue streams, bolstering GE stock.

What can I say? It’s possible. However, I should note that the increase in market value for GE has been dependent on the rebound-from-catastrophe narrative. But compared to early February 2020 — as in, right before the novel coronavirus pandemic — GE is up only about 3%.

If we get hit with deflation, that’s going to hurt multiple industries. Therefore, I think GE is one of those undervalued stocks that risks staying that way.

Apple (AAPL)

Over the years, Apple has consistently ranked as one of the undervalued stocks to buy. Despite its soaring price, many advocates argued that the Apple brand is basically unassailable. Certainly, the iPhone and other iWhatevers have excited the company’s fan base. But as competition started to roll in, AAPL stock became less of a discount.

As you know, Apple often trades in sympathy with the technology-centric Nasdaq. Therefore, when the index started printing red ink, so too did AAPL stock. At time of writing, shares are sandwiched between the 50-day moving average on top and the 200 DMA at the bottom. That’s not necessarily encouraging. However, many eager investors view this as a dip-buying opportunity.

I’m not going to criticize Apple because that is tantamount to fighting words. However, I do have to point out that we if we incur a deflationary environment, that’s not going to support the case of Apple being one of the undervalued stocks to buy. Quite the opposite — it’s one to avoid because discretionary spending will likely go out the window.

Tesla (TSLA)

The Apple of the new generation, Tesla has been a tour de force, blasting away all bearish analysts who dare try to criticize the house that Elon built. Indeed, if the loyalists of TSLA stock are not out in full force yelling at critics, Tesla CEO Elon Musk definitely will.

So, you probably don’t want to short TSLA stock because you might die. You certainly don’t want to be like me buying put options against Tesla. If I suddenly fall off the InvestorPlace radar, you know what happened.

Seriously though, I don’t recommend anyone doing anything crazy regarding TSLA. The fanbase alone could drive shares to the moon, which would make my puts expire worthless. Yet I’m just not seeing the bullish case here at this price and in this environment.

I suppose you could make the argument that Tesla is one of the undervalued stocks because it could completely transform the electric vehicle ecosystem. Nevertheless, in my opinion, no company is strong enough to take on deflation — not the kind that is possibly brewing over the horizon.

Volkswagen (VWAGY)

In January of this year, I suggested as an idea that InvestorPlace readers should look into Volkswagen. Germans as you know are right up there in terms of best engineers in the world. With them, it’s not just about technology but the quality and craftsmanship they put into their vehicles. Also, I had this to say:

“Now, I like VWAGY stock because it hits all the notes in the automotive world. For one thing, it may take some time before the combustion engine is kaput. In the meantime, even combustion is making improvements. Also, Volkswagen is launching its own EVs. Even the VW-owned Porsche Taycan has received rave reviews.”

The latter point about EVs is what attracted social media outlets. By March 17, VWAGY stock closed at over $42. Since then, shares have lost more than 19% of market value. Nevertheless, VWAGY is up nearly 56% from the time of my January article.

Before the social media push, I think you can easily make the case that Volkswagen fit into the undervalued stocks group. But the aforementioned 19% drop may be justified because there are many concerns about how social media is creating extreme boom-bust cycles.

Carnival (CCL)

With cruise ships at one point being the face of the coronavirus, it was no surprise that Carnival and so many other related firms utterly tanked. Well before the pandemic, many would-be travelers viewed cruise ships as giant floating Petri dishes. Yes, there are two sides to the story. Of course, it doesn’t help the case for CCL stock fundamentally that the media sensationalizes the bad news.

I think the problem for Carnival now is that no one needs to sensationalize anything. Most Americans reported fears about being in a movie theater until mid-2021. Imagine accelerating that proposition with a cruise ship invite — I can hear most folks saying, no thanks! Still, that hasn’t prevented CCL from being one of the top undervalued stocks to buy.

Over the trailing year, CCL stock is up over 141%. On a YTD basis, we’re looking at a 42% gain. But we shouldn’t forget that compared to the opening session of January 2020, CCL is actually down 42%. In this framework, Carnival is one of the undervalued stocks that are hurting — and for a reason.

Again, if we suffer deflationary pressures, that’s not going to help Carnival irrespective of whatever happens with Covid-19.

Toll Brothers (TOL)

Toll Brothers is a tricky name among undervalued stocks because there are some factors to appreciate if you’re a bull. For one thing, Toll Brothers represents good value in terms of price-to-free-cash flow and price-to-operating cash flow, both metrics which come in significantly under the industry median.

Also, the low interest rate environment has been very bullish for the real estate market. So long as the Federal Reserve does its best to keep yields low, this should inspire more buyers to get in while borrowing costs are cheap.

At the same time, TOL stock is risky. No, shares aren’t hurting. On a YTD basis, they’re up almost 34%. Also, on the revenue front, things are looking up. Toll Brothers’ trailing-12-month revenue is $7.3 billion. On the other hand, its fiscal 2020 came in at under $7.1 billion.

However, if we encounter a deflationary environment, I wouldn’t want to be levered up on TOL stock. Because our economy is so tied to consumer spending, any negative impact here would probably reverberate throughout the nation. That’s not good for jobs, even high-paying ones, which then may hurt the real estate market.

Kohl’s (KSS)

It may not look like it from the charts, but Kohl’s is fundamentally one of the undervalued stocks that are hurting. Yes, on a trailing-year basis, KSS stock is up 371%. Also, shares have carried this momentum into 2021, up 48% YTD. These stats may dazzle but investors may also want to check the financials before placing a bet.

Here, the story gets much more muddled. For the company’s fiscal 2021, it rang up $15.96 billion in revenue, down 20% from the year-ago quarter. True, the coronavirus killed demand so it’s not fair to be bearish on that metric alone. Yet in its latest quarter ended Jan. 31, 2021, Kohl’s delivered $6.14 billion in top-line sales, which happened to be 10% lower year-over-year.

Admittedly, this is a significant improvement from being down 20% in sales. Yet the problem for Kohl’s is two-fold. First, the company better pray that these vaccine-resistant Covid-19 strains don’t start a wildfire of new and deadlier cases. I’d also keep a close eye on what’s going on in Miami Beach and the spring break safety concern.

Second, deflation will most likely kill consumer spending. I mean, the fact that the personal saving rate was so high in 2020 — and not just the pandemic impact — was a contributor to Kohl’s woes last year.

On the date of publication, Josh Enomoto held a short position in TSLA.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management and healthcare.