C. HUYGENS - Saturday, April 12, 2014
Weekly Reputation Index Metrics
At the close of trading April 11, 2014, REPUVART and REPUVAR stood at 3544.57 and 2959.00 respectively. Over the past four weeks, the former has changed by 0.87%, while the latter has changed by 0.79%. The benchmark S&P500 Composite Index stood at 1581.50 (31 Dec 2001=1000) and has changed over the past four weeks by -1.38%. The current calendar year spread between REPUVAR and the S&P500 is -1.21%.
Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by 7.56% and 5.19% respectively; the S&P500 Composite Index has changed by 13.95%. The trailing 12-month spread between REPUVAR and the S&P500 is -8.76%.
Over the trailing 36 months, the REPUVART and REPUVAR have changed by 33.01% and 26.32% respectively; the S&P 500 Composite Index has changed by 38.16%.
The 4-week, trailing 12-month, and trailing 36-month returns for REPUSPX are 1.38%, 20.07%, and 81.02% respectively. The trailing 12-month spread between REPUSPX and the S&P500 is 6.12%.
The spreads between the S&P500-only index informed by reputation metrics, REPUSPX, and the broad market index informed by reputation metrics, REPUVAR, for the calendar year and for the trailing twelve months respectively are 0.66% and 14.88%.
Other interval changes in the magnitude of the indices are
shown in the tables and charts below.
Expectations drive behavior. The current equity market downturn is being driven by expectations that the equity market downturn with continue. That’s “reputation,” in a nutshell
From the Financial Times
, “When momentum turns, it turns hard and it’s unclear when people will step in and support them,” said George Pearkes, an analyst at Bespoke Investment Group.”
And now the same, also from the Financial Times
, in finance double speak. “Cracks have formed in high growth, strong momentum and high priced stocks,” noted the research from Goldman Sachs. “The performance of those parts of the market has damaged hedge fund performance and led to de-risking that could threaten markets at the index level if it spreads beyond what, up until now, have been fairly narrow borders. Biotech, small-cap, information technology and internet retail shares have been notable laggards.”
The rising tide that has floated all ships is slowly receding. More rational expectations will prevail.
After one quarter, the greatest gains in the RepuStars Variety portfolio for 2014 year are being reported by Rite Aid (RAD), which leaps first place with returns of 25.94%. BRF SA (BRFS) moves up to second place with returns of 18.65% year to date. Veolia Environment (VE) slips to third with returns, unchanged from last week, of 18.00%. These are three of the 41 firms identified by the RepuStars Variety algorithm at the start of 2014 as value opportunities.
As for those whose reputational value may have been overestimated, Pharmacyclics (PCYC) is in the cellar with returns of -36.3, Rent-A-Center Mobile Telesystems (MBT) moves down with returns of -17.04%, and (RCII) holds with -16.55% for the year.
Turning to RepuSPX whose constituents are limited to the S&P500 members, the top three performers in a portfolio of 35 names are Garmin (GRMN) at 17.57%, Entergy Corp (ETR) at 14.61% and Ameren (AEE) at 11.97%.
Side Note: A description of the portfolio constituents and historical returns data from December 31, 2001 can be obtained on request from Technology Option Capital, its manager. Click Here
The RepuStars® Variety Corporate Reputation Index calculated by S&P/Dow Jones Indexes is the first-ever composite equity index based on a quantitative value strategy informed by the Steel City Re Reputational Value Metrics.
The metrics comprise non-financial indicators of reputational value (RVM) and ranking (CRR). These are the same metrics that power the reputation controls provided by Consensiv
, and the league table of reputational value, the Consensiv 50
, published periodically, and most recently January 1, 2014, by CFO.com.
The RepuStars Variety Corporate Reputation Index has two versions: a total returns index and a price index, whose ticker symbols are, respectively, REPUVART
Click on the ticker names for real time quotes.
The RepuStars Variety Corporate Reputation Index tracks up to 57 company stocks that appear to be underpriced relative to Steel City Re’s proprietary Reputational Value Metrics™, which track 7400 companies weekly. The principles behind measuring reputational value are described in the book, Reputation, Stock Price, and You: Why the market rewards some companies and punishes others (2012, Apress).
The RepuStars indices are reconstituted annually in the first week
of January and posted by S&P/Dow Jones Indexes in the third week. The Indices were last reconstituted 18 Jan 2014.
REPUSPX is a pocket index with portfolio constituents being selected algorithmically by the same criteria as the constituents for REPUVAR and REPUVART, except that the field of eligible companies is limited to constituents of the S&P500 composite equity index.
The strategy used to pick the constituent members of REPUSPX, REPUVAR and REPUVART is discussed in the book, Reputation, Stock Price and You: Why the market rewards some companies and punishes others
(Apress, 2012). (Link below)
Reputation, Risk and Finance
Reputation management through superior control of a company's
intangible assets may be one of the best paths to value creation
today. If it is not on your agenda, perhaps it should be. Here are
several things you can do right now to start creating value for your
1. Become better informed. Participate in our regular Mission Intangible Monthly Briefings
the second Friday of every month, read the book, Reputation, Stock Price and You: Why the market rewards some companies and punishes others (2012)
or its predecessor, Mission: Intangible. Managing risk
and reputation to create enterprise value (2010)
, available at
the IAFS Store
, specialty finance sector retailers
or other leading online book retailers
2. Become a member
of the Intangible Asset Finance
Society and engage.
3. Join our community on Linked-In
and stay in the information
S&P Dow Jones Indices is a registered trademark of S&P Dow Jones Indices LLC, a part of McGraw Hill Financial; RepuStars and Steel City Re” are registered trademarks of C. Huygens & Co. LLC. The method underpinning the RepuStars Variety indexes is subject to a pending patent assigned to C. Huygens & Co. LLC. S&P McGraw Hill Financial and its affiliate (S&P Dow Jones Indices) makes no representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and McGraw Hill Financial shall have no liability for any errors, omissions, or interruptions of any index or the data included therein. Past performance of an index is not an indication of future results. All information provided by S&P Dow Jones Indices is general in nature and not tailored to the needs of any person, entity or group of persons. S&P Dow Jones Indices receives compensation in connection with licensing its indices to third parties. It is not possible to invest directly in an index. Exposure to an asset class represented by an index is available through investable instruments offered by third parties that are based on that index. S&P Dow Jones Indices does not sponsor, endorse, sell, promote or manage any investment fund or other investment vehicle that seeks to provide an investment return based on the performance of any Index. Investment products based on the RepuStars Variety Corporate Reputation Indexes are not sponsored, endorsed, sold or promoted by Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC, or their respective affiliates and none of Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC and their respective affiliates make any representation regarding the advisability of investing in such products. Inclusion of a company in any of the indexes in this piece does not in any way reflect an opinion of Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC or any of their respective affiliates on the investment merits of such company. None of Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC or any of their respective affiliates is providing investment advice in connection with these indexes.