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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 periodicals archive ?
The initiative provides three alternatives for young Emiratis willing to contribute towards caring for orphans and minors.
"The UAE Initiative for Connection with Orphans and Minors" also includes a virtual academy to encourage self-development of orphans and minors, and programmes aimed at encouraging orphans and minors to connect with government workplaces as part of their quest for future careers, and
Gregory Orthodox Society for the Elderly and Orphans, two orphan care centers in Damascus, touring the newly-established classes in Dar al-Aman.
Taiba Fadul al Maula explained to SUNA that the money directed towards project " My Occupation" for training orphans in each of Khartoum (110) orphans and White Nile (70) orphans and North Darfur (50) orphans, besides small projects for 400 widows and mothers of orphans in Khartoum , North and south Darfur.
The Queen added that when His Late Majesty King Hussein visited an orphanage, he relayed the message that orphans are everyone's responsibility.
He said that Islam had emphasized on the help of needy people and specially orphan children so that their deprivation could be removed and they did not feel themselves alone in the world.
7 ( ANI ): A new research has observed that chimpanzees, who are orphaned, frequently engaged in social play, but their play bouts were much shorter and resulted in aggression more often.
All those in the Orphans Dormitory wait for Eid impatiently, he said, lamenting that they didn't receive funds from the dormitory or from the government to buy Eid clothes.
"The number of Bahraini orphans that we provide support for has increased from the original number of 1,000 in 2008 to around 1,300," said society vice-president Mirza Al Misbah.
Omeros Corporation (Nasdaq:OMER), a clinical-stage biopharmaceutical company, said on Wednesday that with its identification of compounds that interact selectively with each of four additional orphan G protein-coupled receptors (GPCRs), namely GPR19, GPR20, GPR31 and GPR141, it has now unlocked over 20% of the 77 Class A orphans.
27, 2011, SPA -- Prince Salman Ibn Abdulaziz, The Governor of Riyadh Province and the Chair of the Charity Committee for Orphans Care "ENSAN" patronized last night at King Faisal Auditorium here, the First International Conference on Orphans care in the presence of...
Previous researchers have found that a high percentage of children experienced symptoms of posttraumatic stress disorder (PTSD) after being exposed to traumatic events, especially the orphans who lost their parents at the same time (Norris et al., 2002; Zhang, Wang, & Sun, 2000).