A:

The big uglies are stocks that the investing public does not find attractive. Industrial companies like steel, mining and oil are considered big uglies because investors favor the more contemporary investment opportunities, like those in the technology sector. Stocks in the big uglies category often sell at low prices because of their unpopularity - which means the big uglies often are priced below value.

While the big uglies may not be as appealing to investors as much as tech stocks, they typically offer good long-term earnings, growth and dividends. Savvy investors realize the benefits of including the big uglies into their portfolios, while investors looking to get rich quick tend to overlook the low price-to-earnings ratio of the big uglies.

Regardless of what is flashier, an increasing number of investors will turn to the big uglies during times of market decline for the relatively secure earnings they offer.

For more on this topic, read Using the P/E Ratio and A Guide to Investing in Oil Markets.

This question was answered by Bob Schneider.

RELATED FAQS
  1. What does it mean when someone refers to the "Big Three" automobile sector?

    Learn which companies make up the Big Three. Learn what role the Big Three plays in the American economy, from bailouts to ... Read Answer >>
  2. What is the average price-to-earnings ratio in the oil & gas drilling sector?

    Investing in the energy sector provides an opportunity for value investors, but it is necessary to understand metrics such ... Read Answer >>
  3. What is the average price-to-earnings ratio in the drugs sector?

    Learn what the average price-to-earnings ratio is for companies operating in the drugs sector and why this metric is important ... Read Answer >>
  4. What is the average price-to-earnings ratio in the telecommunications sector?

    Discover the average trailing and forward price-to-earnings ratios for the telecommunications sector and the usefulness of ... Read Answer >>
  5. What is the average price-to-earnings ratio in the financial services sector?

    Learn how to calculate and use the price to earnings (P/E) ratio when analyzing an investment and what the financial services ... Read Answer >>
Related Articles
  1. Investing

    Abercrombie & Fitch Really Wants the Uncool Kids

    Call it better late than never, but Abercrombie & Fitch (NYSE: ANF) has decided it no longer wants to be the sort of store where only the cool kids shop. Now, the teen retailer wants everyone ...
  2. Investing

    What to Expect From Big Lot's Earnings (BIG)

    With BIG shares up 8% so far on the year, including 6% gains in the past month, some investors have made up their minds.
  3. Investing

    Big Lots Stock to Trade Ex-Dividend (BIG)

    As has been the case for other retailers, investors are willing to dismiss near-term revenue weakness as long as profits remain the focus.
  4. Tech

    Big Data in Financial Services Comes With Some Risks

    Big data is playing a larger role in finance but its application does not come without risks.
  5. Investing

    Big Lots Stock To Trade Ex-Dividend Wednesday (BIG)

    Big Lots will send its dividend payment on June 24 to shareholders of record as of June 10.
  6. Investing

    This Retailer Just Raised Guidance (BIG)

    Not many retailers are raising guidance. This is one exception.
  7. Investing

    Are There Still More Gains For Steel Stocks Ahead?

    The steel sector has rebounded quite nicely over the last few months as investors have looked for value. Given the longer term demand picture, the value is still there and more gains could still ...
  8. Investing

    2 Reasons to Expect a Soft FQ4 From Steel Dynamics

    While the company is doing a solid job controlling what it can, the overall steel industry continues to soften.
  9. Investing

    Benefits and Risk of Growth Stock

    A growth stock is a share in a company whose earnings and sales are growing faster than those of most other companies.
  10. Investing

    Is Now The Time To Invest In Steel?

    Recent price drops present long-term opportunities, while many stable ETFs remain attractive. Learn your best options for turning cold hard steel into cold hard cash.
RELATED TERMS
  1. Steel Industry ETF

    A sector exchange-traded fund that invests only in companies ...
  2. Big Bath

    The strategy of manipulating a company's income statement to ...
  3. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing ...
  4. Big Mac PPP

    A survey done by The Economist that determines what a country's ...
  5. Forward Price To Earnings - Forward P/E

    A measure of the price-to-earnings ratio (P/E) using forecasted ...
  6. Growth Stock

    Shares in a company whose earnings are expected to grow at an ...
Hot Definitions
  1. Price Elasticity Of Demand

    A measure of the relationship between a change in the quantity demanded of a particular good and a change in its price. Price ...
  2. Market Capitalization

    The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying ...
  3. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Down Round

    A round of financing where investors purchase stock from a company at a lower valuation than the valuation placed upon the ...
  6. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
Trading Center