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Stable low images |
Some stocks are durably ignored, ill-loved, even hated, but without frenzy.
These outcasts keep tiny images, specially in depressed or even temperate periods.
Here is an indicative table.
Depressive market
(mkt average img. = 0,6)
0,4 to 0,6
Neutral market
(mkt average img. = 1)
0,6 (0,7) 0,8
Buoyant market
(mkt average img. = 1,7)
0,8 to 1,3
Declining firms have sad-looking fundamentals
(prolonged sales and margins weakness).
This is often coupled with a sullen image, much more than an understandable large
risk premium. They are priced like scrap.An exaggeration if there are some fine remains and the will to jump back.
The image deliquescence is often slow for businesses with a lengthy good history
that fills our hearts with nostalgia (nostalgia stocks)On the other hand, quick love, quick oblivion. If the firm's good standing was
recent and the disappointment is big, the fall may be momentous. Here we find
fallen angels, the archeological remains of shooting / falling stars.
Forgotten stocks (an antique hunter's paradise).
Even if the market has a big heart, it cannot love every stock at the same time.
It shows no interest for various small, average-size, and even large firms, relatively
thriving or even gifted with great hidden virtues. Why do they stand forgotten on
the sideline? The circumstances are various:
If the general stock market climate is bearish, those overlooked stocks are legion.
Investors prefer by far liquid accounts and bonds than shares. Not so keen on
celebrity stocks in those periods, they are even less attracted by side shows,
or if so at rock bottom prices.If the climate has been fair only for short time, this new bullishness warms only
the best-known stocks or those best-rated in the image table.
Secondary and ill-loved ones have to wait before entering the game.When the market sun becomes bright enough, they stop hibernating and start
a decent canter. Or a gallop if some market fad reaches their industry.
Bad reputation stocks, sometimes for good reasons, sometimes for mysterious
ones, but what can you do about xenophobia?If the image recover, it can only be very slowly, or under a force 10 positive shock,
a thing you don't see everyday.

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This page last update:
12/0413
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