Weekly Reputation Index Metrics
At the close of trading March 15, 2013, REPUVART and REPUVAR stood at 3289.75 and 2810.41 respectively. Over the past four weeks, the former has changed by -1.25%, while the latter has changed by -1.38%. The benchmark S&P500 Composite Index stood at 1359.40 (31 Dec 2001=1000) and has changed over the past four weeks by 2.69%.
Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by 14.08% and 12.13% respectively; the S&P500 Composite Index has changed by 11.15%. Over the trailing 36 months, the REPUVART and REPUVAR have changed by 62.38% and 55.44% respectively; the S&P 500 Composite Index has changed by 34.61%.
Other interval changes in the magnitude of the indices are shown below.
AnalysisHaving survived three weeks of sequestration and the Ides of March, pessimism is abating. Optimism is hanging around. REPUVAR is regaining some ground.
Speaking of companies whose intangible assets, in terms of their excess cash-generating potential (Reputational Premium), appear to have been undervalued at the start of this calendar year, it is not yet rosy. The greatest gains in the portfolio for the year are being reported by Companhia Energetica Minas Gerais (ADR) (CIG) that has moved up from 3rd place with year to date returns of 20.20%. Lamar Advertising Co (LAMR), drops back to second place with a return of 19.95%, up a bit from last week. Genpact Ltd (G) is holding at third with a return of 10.49%. These are three of the 19 firms identified by the RepuStars Variety algorithm at the start of the year as value opportunities.
As for those whose reputational value has not panned out so far, the greatest disappointments this year are VeriFone Systems Inc. (PAY) at -32.83%; Fusion-IO, Inc. (FIO) at -22.62%, and Compagnie Generale de Gephysqu Vrts SA. (CGG) at -21.21%.
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.
BackgroundThe 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). The RepuStars Variety Index has two versions: a total returns index and a price index, whose ticker symbols are, respectively, REPUVART and REPUVAR. Click here 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 describe in the book, Reputation, Stock Price, and You (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 20 Jan 2013.
Reputation, Risk and FinanceReputation 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 organization:
1. Become better informed. Participate in our regular Mission Intangible Monthly Briefings held on 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 flow.