Year-to-date the Harvey Norman Holdings Limited (ASX: HVN) share price has been amongst the worst performers in the retail sector.
Despite an incredible 16% gain in the last 30 days, the electronics retailer's shares have tumbled around 13% since the turn of the year.
Are its shares still in the bargain bin?
Whilst its shares arguably looked reasonably good value a month ago, unfortunately I feel they are probably overvalued now following the strong run.
Especially with the launch of Amazon in Australia not looking to be too far away. As we wrote recently, the retail behemoth has begun hiring in the country for its giant warehouse in Victoria.
While no date has been given for a launch, I wouldn't be at all surprised to see Amazon commence operations here before the important Christmas period.
And if the U.S. and U.K. is anything to go by, Amazon's launch could put significant pressure on local retailers like Harvey Norman, JB Hi-Fi Limited (ASX: JBH), and Myer Holdings Ltd (ASX: MYR).
So although Harvey Norman's shares are changing hands at 13x trailing earnings, I do have concerns that FY 2018 could be a tough year for the company that results in a decline in its earnings.
This could ultimately mean that the retailer's shares are a value trap, destined to lose money for investors.
In light of this, I would suggest investors take the safe option and stay clear of Harvey Norman for the time being.