Out-of-favor industry or stock

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Out-of-favor industry or stock

An unpopular industry or stock that usually has a low price-earnings ratio.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Out-of-Favor Industry or Stock

An industry or stock to which many analysts and investors do not pay attentions. Out-of-favor industries or stocks tend to have a low price-earnings ratio and may therefore be undervalued. That is, the low price does not necessarily come from a fundamental problem with the company, but may result simply from apathy on the part of investors. Value investors sometimes seek out-of-favor industries and stocks for long-term investments.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
"David is not afraid to buy out-of-favor stocks and wait for improvement," Lutton said, in a statement.
"This strategy is a portfolio that typically consists of 70-90 high-quality companies and is managed using a reversion to the mean investment philosophy to purchase out-of-favor stocks trading at a discount to historic valuations.