Tags: Lowest | Rated | Stocks | Biggest | Gainers

Lowest-Rated Stocks Turn Into Biggest Gainers

By    |   Monday, 28 Jun 2010 12:58 PM

Some of the top performing stocks this year are ones that have been most disdained by analysts.

Cyclical stocks – those that move most in synch with the economy – have the highest portion of analyst “sell” ratings, according to Bloomberg. Yet banks, real-estate developers and car makers have gained 12 percent on average so far this year.

Huntington Bancshares has soared 66 percent during that period, the fourth biggest gain in the Standard & Poor’s 500 Index, despite the fact that it had twice as many “sell” ratings as “buys” in December.

Many investors, including Warren Buffett, have made some of their best profits on stocks that were out of favor with most of the market.

“The crowd tends to get you off into the wrong area at the wrong time,” Barry James, chief executive officer for James Investment Research, told Bloomberg.

“When the analysts are all on board saying only good things can happen, it’s already built into the price. There’s not a lot of upside left.”

Value investing, the idea of buying stocks that are undervalued based on a statistical measure, has proven quite successful over time.

“In the long run, value investing has beaten growth in markets around the world, though there have been periods of time when that’s not the case,” Chris Geczy, director of The Wharton School’s wealth-management program, told Moneynews.com.

“The contrarian style generally rewards investors.”

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Some of the top performing stocks this year are ones that have been most disdained by analysts. Cyclical stocks those that move most in synch with the economy have the highest portion of analyst sell ratings, according to Bloomberg. Yet banks, real-estate developers...
Lowest,Rated,Stocks,Biggest,Gainers
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2010-58-28
Monday, 28 Jun 2010 12:58 PM
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