My conception of the word is a bit different from investopedia's (below):
"When a company's stock seems undervalued, investors are sometimes drawn into purchasing it in hopes of a stock price appreciation. If stock price is the only factor an investor looks at before buying a stock, he or she could end up with a stock whose value is likely to decline even further."
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My definition is similar. A company might look good on paper but there's probably a reason why it is trading at such a discount (in this case well below book).