Unloved Stock

AAA

DEFINITION of 'Unloved Stock'

A stock that is out of favor with investors. The term unloved stock often refers to stocks that were once popular with investors but have become largely ignored due to a variety of factors. These factors include poor performance, too much volatility, changing regulations, new management, lowered or suspended dividends, inconsistent earnings from quarter to quarter, share price, the company being viewed as too risky or has taken on too much debt or the company simply fell out of favor with investors who decide to sell, resulting in falling stock value. An unloved stock may rebound, or its price could continue to drop and/or trade under decreased volume.

BREAKING DOWN 'Unloved Stock'

Unloved stocks are those that once enjoyed investor attention, but now are disregarded by investors and analysts. Investor attention could be the result of interest brought on by various media sources, or popularity fueled by high-profile investor recommendations. For example, if famed-investor Warren Buffett invests heavily in a relatively unknown company, that company will likely enjoy increased investor attention, resulting in higher trading volume. While some of these ignored stocks do make a comeback and rally to their former popularity, others slowly attract less and less attention. Unloved and out of favor stocks may be sought by value investors who step in and buy stocks while other investors are selling, often at very low prices. Value investing is a strategy that involves selecting stocks that are trading for less than their intrinsic values.

RELATED TERMS
  1. Investor

    Any person who commits capital with the expectation of financial ...
  2. Day Trader

    A investor who attempts to profit by making rapid trades intraday. ...
  3. Price-To-Book Ratio - P/B Ratio

    A ratio used to compare a stock's market value to its book value. ...
  4. Value Investing

    The strategy of selecting stocks that trade for less than their ...
  5. Intrinsic Value

    1. The actual value of a company or an asset based on an underlying ...
  6. Passive Income

    Earnings an individual derives from a rental property, limited ...
Related Articles
  1. Investing Basics

    The Five Biggest Stock Market Myths

    Stocks that go down must come up, right? Wrong. We bust this myth and four other common market misconceptions.
  2. Active Trading

    Warren Buffett: How He Does It

    We look at the Sage of Omaha's methodology for evaluating value stocks.
  3. Forex Education

    Using The Price-To-Book Ratio To Evaluate Companies

    The P/B ratio can be an easy way to determine a company's value, but it isn't magic!
  4. Options & Futures

    Finding Undiscovered Stocks

    Wall Street tends to focus on large cap stocks, leaving other stocks under-followed and undervalued.
  5. Investing

    The Art Of Selling A Losing Position

    Knowing whether to sell or to hold is tough. And no rule fits all. Find out what to consider.
  6. Options & Futures

    Guide to Stock-Picking Strategies

    There are many ways to make money, knowing how to choose the best stocks is one of them.
  7. Term

    What is Passive Income?

    Passive income is earned by someone from ventures in which they did not actively participate.
  8. Investing Basics

    Calculating the Margin of Safety

    Buying below the margin of safety minimizes the risk to the investor.
  9. Investing Basics

    If You Had Invested Right After Amazon's IPO

    Find out how much you would have made if you had invested $1,000 during Amazon's IPO, including how the power of the stock split affects investment growth.
  10. Professionals

    Holding Out for Capital Gains Could Be a Mistake

    Holding stocks for the sole purpose of avoiding short-term capital gains taxes may be a mistake, especially if all the signs say get out.
RELATED FAQS
  1. What is the difference between passive and active asset management?

    Asset management utilizes two main investment strategies that can be used to generate returns: active asset management and ... Read Full Answer >>
  2. What is the formula for calculating the capital asset pricing model (CAPM) in Excel?

    The capital asset pricing model (CAPM) measures the amount of an asset's expected return given the risk-free rate, the beta ... Read Full Answer >>
  3. What is the formula for calculating return on investment (ROI) in Excel?

    Return on investment (ROI) measures the performance of an investment by measuring the gain from an investment and the cost ... Read Full Answer >>
  4. Is it better to buy A-shares or a no-load mutual fund?

    Mutual funds and other pooled investments are popular among investors because they provide a level of diversity and professional ... Read Full Answer >>
  5. What is the smallest amount of shares I can buy?

    There is no minimum amount of shares that need to be bought in a single transaction, so an investor can purchase as little ... Read Full Answer >>
  6. Is Book Value Of Equity Per Share (BVPS) a good metric for long-term value investing?

    Book value of equity per share, or BVPS, also known as net asset value per share or simply equity per share, estimates the ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Recession

    A significant decline in activity across the economy, lasting longer than a few months. It is visible in industrial production, ...
  2. Bubble Theory

    A school of thought that believes that the prices of assets can temporarily rise far above their true values and that these ...
  3. Stock Market Crash

    A rapid and often unanticipated drop in stock prices. A stock market crash can be the result of major catastrophic events, ...
  4. Financial Crisis

    A situation in which the value of financial institutions or assets drops rapidly. A financial crisis is often associated ...
  5. Election Period

    The period of time during which an investor who owns an extendable or retractable bond must indicate to the issuer whether ...
  6. Shanghai Stock Exchange

    The largest stock exchange in mainland China, the Shanghai Stock Exchange is a nonprofit organization run by the China Securities ...
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!