Orphan Stocks
What It Is:
Orphan stocks is a colloquial term for stocks that analysts and investors seem to disregard.
How It Works/Example:
Orphan stocks are stocks that investors and analysts tend to ignore. Also known as wallflowers, orphan stocks usually are not outstanding market performers, but occasionally the reasons for a stock being called an orphan stock may not be apparent.
Why It Matters:
Value investors sometimes exclusively search for orphan stocks. Because their stock prices have not been overblown by investor demand, orphan stocks often have low P/E ratios, which many investors see as an indicator for solid long-term returns.
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Cached on May 24, 2012, 11:54 am