Specific traits of a stock determine its image range
The criteria that help to value the image coefficient structural levels and the
image coefficient variation ranges are specific to every stock.
But main stock categories (or "archetypes") can be found.
=> Each category fits specific traits in the investors' mental perception.
This site brings help to:
by describing for every one its image's
height and stability
Spot the 15 main
by showing (for every stock family,
and also in general)
how these images usually move,
what causes such changes.
The two basic classification tables, A & B, appear below:
Table A classifies the image types
(and the next page gives details on every one)
Table B shows for each type its image coefficient range
A - The various types of stock images
(Beta below 1)
(Beta above 1)
Slowly declining moderately
cyclical or risky firms
Bad reputation stocks
Very risky fast declining firms
Very cyclical or erratic stock
Undiscovered emerging stocks
Special situations, lottery
Great classical stocks
Good moderately cyclical
Steadily emerging stocks
...as falling angels
Very cyclical / irregular
stocks in friendly periods
Emerging or forgotten
stocks caught in a spotlight
Great (= big, fast and
recurrent) growth stocks
3 B (*)
Shooting stars, special
situations, lottery tickets,
pre-emerging and "future"
firms with puffed prices.
(*) In dissidence with the thesis telling that high return (low image) and high volatility (high beta)
are always correlated and that the beta of a stock is a constant. See also image & beta
Details on each type
This rating / beauty contest (top grades in the southwest box) rests on
adorned with quite classical risk premiums and volatilities.
Does this destroy the notion of image? Not at all! Simply:
The market is only relatively inefficient.
On a fully efficient market, prices would always reflect exactly and in a
rational way all known information (on the firm, the economy, the interest
rates...) and faithfully measure the real stock prospects.
In a semi-efficient market, fundamentals have a looser influence on
prices, but that influence applies to both EEVs and images.
But the image, subjected to attitudes and sentiments, has also its own
life, which has an important weight on prices. Compared to fundamentals
(even adorned with risk premiums), the stock market is usually late,
early, or sickly excessive. Most of the times, some uncoupling occurs
between the price and the EEV.
To find the families descriptions, click the hyperlinks inside the table
B - The image coefficient ranges for every type of stocks
Whole market climate
Attitude / image related to
Average img. 0,6
Average img. 1
Average img. 1,7
1. Low image
1A - stable
1B - volatile
0,4 to 0,6
0,2 to 0,4
0,6 (0,7) 0,8
0,3 (0,5) 0,7
0,8 to 1,3
0,7 to 1,2
2. Mixed image
2A - stable
2B - volatile
0,6 to 0,9
0,4 to 0,7
0,9 (1,1) 1,3
0,7 (0,9) 1,2
1,4 to 1,8
1,3 to 2,0
3. High image
3A - stable
3B - volatile
1,0 to 1,3
0,8 to 1,1
1,3 (1,6) 1,8
1,2 (1,4) 1,9
1,8 to 2,5
2,0 to 3,0
(*) The figures in parentheses in this column are the "structural" (=historical
average) images for the stocks that typify the best the corresponding lines
Handle with care !
One has to be careful to avoid to classify a stock in a category and an image bracket
on the first perception and to get anchored on a stereotype.
It should be checked how close the stock's traits fit the category description in
And even so nothing is foolproof as
* Evolutions take place, as well in the life of a business and of a stock as well as
in the way markets see things.
* Also a stock might combine the traits of several categories.