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. Why should a growth investor consider the metals and mining sector?

    Examine facts and trends about the metals and mining sector and the world economy that make metals and mining stocks attractive ... Read Answer >>
  2. What value metrics are best for analyzing companies in the metals and mining sector?

    Learn what some of the best valuation measures are that analysts commonly use to evaluate companies in the metals and mining ... Read Answer >>
  3. 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 >>
  4. Stocks with high P/E ratios can be overpriced. Is a stock with a lower P/E always ...

    The short answer? No. The long answer? It depends.The price-to-earnings ratio (P/E ratio) is calculated as a stock's current ... Read Answer >>
  5. 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 >>
Related Articles
  1. Managing Wealth

    Investopedia's Oddest Business and Investing Terms

    The oddest business and investing terms found on Investopedia.
  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. 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.
  5. Investing

    This Retailer Just Raised Guidance (BIG)

    Not many retailers are raising guidance. This is one exception.
  6. Small Business

    Five Investing Pitfalls To Avoid, According to Investor's Business Daily

    Common sense or common folly? Discover some approaches to circumventing typical stumbling blocks on the road to profitable investing.
  7. Investing

    How China Impacts the Global Steel Industry

    The Chinese economy is having a significant impact on the performance and profitability of steel and mining stocks.
  8. Investing

    Big Lots Nets Big Gains on Q1 Earnings Beat (BIG)

    The discount retailer reported first quarter fiscal 2016 earnings results that beat Wall Street estimates on both revenue and profits.
  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

    Global Steel Industry Faces “Severe Winter”

    The global steel industry is in deep crisis due to overcapacity, falling prices and rising competition that has threatened the survival of many companies.
RELATED TERMS
  1. Big Uglies

    Old industrial companies in gritty industries (such as mining, ...
  2. Big Four (or Big Five, Big Six, Big Eight)

    The largest accounting firms in the United States as measured ...
  3. Big Figure

    The stem, or whole dollar price, of a price quote. The term "big ...
  4. Steel Industry ETF

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

    The strategy of manipulating a company's income statement to ...
  6. Big Mac PPP

    A survey done by The Economist that determines what a country's ...
Hot Definitions
  1. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  2. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  3. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  4. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  5. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  6. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
Trading Center