orphan


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Orphan Stock

A stock that is not often tracked by analysts. This may be because it is not very well known or because it belongs to an industry that is generally performing poorly. As a result these stocks have low demand and often a low price. Some value investors recommend buying orphan stocks because they could be undervalued. However, because demand is low, orphan stocks have low trading volume and a small change in demand may result in volatility in price. An orphan stock is also called a wallflower.

orphan

Of or relating to a security that is not regularly covered by security analysts. An orphan security is likely to attract little investor interest and to sell at a relatively low price compared with other securities of the same type. For example, an orphan stock is likely to sell at a low price-earnings ratio and an orphan bond will offer a relatively high yield.
Case Study Many individuals in the financial community believe investment banking firms have an obligation to provide continuing research coverage of companies they take public. Research coverage increases a firm's exposure to the investment community, an important benefit for the firm and its shareholders, especially investors who acquired stock during the initial public offering. Dropping coverage of a small company and causing the stock to become an orphan can have a devastating effect on the stock's liquidity and market price. In some instances coverage is discontinued because of a loss of investor interest, in which case any remaining investor interest can virtually disappear. Orphan stocks became more common in the tech stock meltdown of 2000-01. In October 2001 Credit Suisse First Boston dropped coverage of Evolve Software, a software and fiber optics company that CSFB took public for $9 a share in August 2000. Although the stock quickly tripled in price following the initial public offering, it soon got caught in the downdraft of the bear market for technology stocks and had declined to approximately 25¢ per share by the time CSFB dropped its coverage of the firm. The analyst at Credit Suisse First Boston remained bullish on the stock until coverage was suddenly dropped a little more than a year after his firm managed the initial public offering.
References in classic literature ?
Ev'n should I fall o'er the broken bridge passing, Or stray in the marshes, by false lights beguiled, Still will my Father, with promise and blessing, Take to His bosom the poor orphan child.
I was in hopes you would perform your promise to your cousin Katherine, now Miss Miller is gone, and make your portion of the garments for the Orphan Asylum," returned Miss Emmerson gravely.
Yes, of course," said Marilla, as if getting boys from orphan asylums in Nova Scotia were part of the usual spring work on any well-regulated Avonlea farm instead of being an unheard of innovation.
It was clear that they must have been extremely good to that girl whose position in the world seemed somewhat difficult, with her face of a victim, her obvious lack of resignation and the bizarre status of orphan "to a certain extent.
His property was confiscated; his child became an orphan and a beggar.
If he could have known that he was an orphan, left to the tender mercies of church-wardens and overseers, perhaps he would have cried the louder.
Mrs Boffin suggested advertisement in the newspapers, requesting orphans answering annexed description to apply at the Bower on a certain day; but Mr Boffin wisely apprehending obstruction of the neighbouring thoroughfares by orphan swarms, this course was negatived.
You have deceived an orphan, Sir,' said Mr Swiveller solemnly.
The duke he grumbled; said the bag of gold was enough, and he didn't want to go no deeper -- didn't want to rob a lot of orphans of EVERYTHING they had.
Pendril -- this was the man on whose lips hung the future of the orphans at Combe-Raven.
de Boville; "the charities present themselves to you through me: the widows and orphans depute me to receive alms to the amount of five millions from you.
Remembering my father's hospitality protect these orphans.