Note added May 2010: Click here to view an updated post.

We recently commented on activist investor Bill Ackman's unsuccessful efforts to make Target Corporation (NYSE:TGT) more like Wal-Mart Stores (NYSE:WMT). Using the Steel City Re Corporate Reputation Index, we showed that Target's reputation has been on the upswing for the past six months while volatility has been declining. Today we compare and contrast the recent reputation metrics of these two companies seeking further insight into Ackman's surprising defeat,



The 180-day measures of the Target and Wal-Mart Index values and the associated measures of volatilty show opposite patterns. Over the past six months, Target's corporate reputation index values have been rising from approximately the 50th percentile of the 16-member Multiline retail sector to the 75th percentile. Over the same period, its exponential weighted moving average volatility has been steadily declining and as of ealier this week, was below four log orders of magnitude. On the other hand, Wal-Mart, which began this period near the 100th percentile, has slipped to the low 80's while its Index volatility has been climbing and is greater than Target's.

In short, the data show that Target is on the rebound while Wal-Mart appears to be slipping. Small wonder, then, that shareholders sided with Target's management and its strategy at the annual meeting last month.