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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
Located at the corner of Mont-Royal Avenue and Jeanne-Mance Street, steps away from the reception centre, the YM-YWHA encouraged child and adult survivors to participate in its programs and offered free memberships to war orphans. Gatekeepers hoped that YM-YWHA programs would help refugee youths integrate into the larger Jewish community, socializing in a more diverse yet still controlled space.
To some war orphans, it doesn't matter whether their dads entered the service through the draft or as volunteers.
Foster father to 5,000 war orphans NINE-YEAROLD Tommy, of Cardiff, gazed up at the Minister of Pensions today and told him he wanted to be a bricklayer.
''Now for the first time in our lives, war orphans across the nation can feel the warmth of our motherland,'' said Sumie Ikeda, a representative for the plaintiffs.
..TEXT: ALI ABBAS, the 13-year-old Iraqi war orphan, has been fitted with his new arms, it was reported today.
Speaking at his Chester home, he said they may wish to follow the example of pop singer Mariah Carey who has reportedly said she would like to adopt a war orphan. He said: 'Judith is in Europe to check out the legal situations in various countries, to see which ones would be most amenable to allow a foreign couple to adopt.
IRAQI war orphan Ali Abbas - who lost his arms and 16 family members when a US missile razed his Baghdad home two years ago - has been told by officials at the Department Of Work And Pensions that he's not entitled to the full Disability Living Allowance, nor will it be backdated...
ALI Abbas, the Iraqi war orphan who graced many a front page after getting his limbs blown off, is to become a British citizen.
The Eastern Daily Press newspaper was asked to help Issa after bringing five-year-old African war orphan Tenneh Cole to Norwich to have a bullet removed from her head.
It was at Longford Park that Mr Guest first became interested in Korea when the school adopted a Korean war orphan in the late 1950s, sending regular food parcels and gifts.
THE bureaucrat who refused to pay Iraqi war orphan Ali Abbas the full Disability Living Allowance should be sacked.
IRAQ war orphan Ali Abbas has been robbed of Government financial help - because officials suggest he cannot prove when he lost his limbs.