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. Under what circumstances would someone enter into a repurchase agreement?

    Learn when investors want to enter into a repurchase agreement, such as to gain quick access to liquidity and enjoy flexibility ...
  2. Is there a way to include intangible assets in book-to-market ratio calculations?

    Find out more about the book-to-market ratio and how to calculate a public company's book-to-market ratio including its intangible ...
  3. What types of corporations would be expected to have higher growth rates than more ...

    Understand factors that contribute to certain corporations growing at higher rates than other corporations to the benefit ...
  4. What tax implications are there for parties involved with a reverse repurchase agreement?

    Learn about the tax consequences that the buyer can face as a result of a reverse repurchase agreement ("reverse repo") with ...
RELATED TERMS
  1. Valium Picnic

    A market holiday or a slow trading day.
  2. Dividend

    A distribution of a portion of a company's earnings, decided ...
  3. Einhorn Effect

    The sharp drop in a publicly traded company’s share price that ...
  4. Institutional Ownership

    The amount of a company’s available stock owned by mutual or ...
  5. Market Value

    The price an asset would fetch in the marketplace. Market value ...
  6. Acquisition

    A corporate action in which a company buys most, if not all, ...

You May Also Like

Related Articles
  1. Stock Analysis

    3 Stocks To Buy and Hold For the Rest ...

  2. Investing

    Top Reasons Stock Indices Could Be Biased

  3. Trading Strategies

    Why There's No Such Thing As A Stock ...

  4. Investing

    Why Do Companies Choose NASDAQ for Their ...

  5. Investing Basics

    What Happened To Rite Aid Stock In 1999?

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!