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The tech sector has been a tough industry for investors for the past couple of months. A number of factors which include global economic weakness, competitive pressures and shifts in consumer buying habits have brought on challenges for many tech companies. Investors have reacted by avoiding and even selling out of stocks which are perceived to be at risk of slow growth. As a result, a number of tech stocks have been brought down to levels that even some value investors might appreciate.

Buying stocks that are in a downtrend can be tricky and it often disappoints investors when stocks that already appear cheap continue to drift lower and lower. That is where the term "value trap" is something to consider. Investors who have been buying tech stocks like Intel (NASDAQ:INTC), Hewlett Packard (NYSE:HPQ) and Microsoft (NASDAQ:MSFT) have been frequently disappointed in recent weeks as these stocks have generally been trending down.

Many investors have been trying to catch a bottom in Corning (NYSE:GLW) shares as well. However, after reporting earnings and guidance, it appears that Corning could become another value trap in the tech sector. Here is a closer look at the company and a few reasons why the shares may continue to drift lower:

Corning Inc., is a leader in specialty glass products and it manufactures "Gorilla Glass" which is used for the touch screens on many smart phones and tablets. This product is seeing solid growth, but other areas are not and that is causing growth and profit concerns for the company. It also makes glass that is used by many major television manufacturers and as this industry is seeing weak demand and fierce competition, margins are getting squeezed for suppliers and manufacturers alike.

Some of the world's largest television manufacturers are struggling. Industry leaders like Sony (NYSE:SNE) and Panasonic (PC) are realizing that this business has become less driven by brand and more driven by price for many consumers. Both Sony and Panasonic shares are trading near 52-week lows and Panasonic doesn't seem hopeful for a quick turnaround as it recently cut its projection for annual TV sales to 13 million sets from 15.5 million. This reduced demand is showing up in the results for Corning and it could be poised to continue as global economic weakness persists in Europe, China and the U.S.

Corning recently announced earnings and guidance which reflects some of the challenges facing this industry. The company is expecting glass prices to decline and profit margins to erode in the coming quarter. That means earnings could disappoint for the next couple of quarters, and that is why this stock is likely to languish as a "value trap."

Since Corning shares have been trending lower in 2012, it could also see tax loss selling pressure starting in November and going through December. This is another reason investors might want to avoid Corning shares for now.

Here are some key points for GLW:
Current share price: $11.73
The 52 week range is $10.62 to $15.75
Earnings estimates for 2012: $1.26 per share
Earnings estimates for 2013: $1.35 per share
Annual dividend: 36 cents per share which yields 3%

Data is sourced from Yahoo Finance. No guarantees or representations are made. Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only. You should always consult a financial advisor.

Source: Why Corning Shares Could Become Another Tech Value Trap