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.

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