Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Wallflower

What it is:

Wallflower is slang for a stock that analysts and investors tend to neglect.

How it works (Example):

Usually used to describe individuals who are relegated to the sidelines in social events, in investing, wallflowers are stocks that investors and analysts tend to ignore. Also called orphan stocks, wallflowers do not typically display outstanding market performance, but sometimes the reason for a stock being classified as a wallflower may not be clear.

Why it Matters:

Value investors sometimes hunt specifically for wallflowers. Because their stock price hasn't been inflated by investor demand, wallflowers tend to have low P/E ratios, which many investors believe can lead to solid long-term returns.