Weekly Reputation Index Metrics
At the close of trading March 22, 2013, REPUVART and REPUVAR stood at 3226.37 and 2756.27 respectively. Over the past four weeks, the former has changed by 1.77%, while the latter has changed by 1.63%. The benchmark S&P500 Composite Index stood at 1356.08 (31 Dec 2001=1000) and has changed over the past four weeks by 2.72%.
Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by 11.86% and 10.09% respectively; the S&P500 Composite Index has changed by 11.44%. Over the trailing 36 months, the REPUVART and REPUVAR have changed by 57.67% and 50.93% respectively; the S&P 500 Composite Index has changed by 32.59%.
Other interval changes in the magnitude of the indices are shown below.
AnalysisThe US markets are booming notwithstanding sequestration, the ongoing threats of Federal Government shutdown, and budget impasses. Europe and the BRICs are floundering, and Cyprus is showing that at least part of the independent part of the island shares at least some traits with Greece. It is Alice in Wonderland on Wall Street.
In this setting, it is not clear what constitutes rational expectations – the foundation for RepuStars. Add fraud, regulatory risk, and other surprises, and it makes for a highly volatile portfolio. The greatest gains in the portfolio for the year are being reported by Lamar Advertising Co (LAMR) returns to first place with a return of 19.78%, down a bit from last week, but plenty to surpass last week’s leader, Companhia Energetica Minas Gerais (ADR) (CIG) that lost more than 12% on rumors of regulatory risk. Bed Bath and Beyond (BBBY) returns to second place with 13.51% for the year, and American Gas Partners (APU) is again in the top rankings with a return of 11.16%. 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 scandal-plagued VeriFone Systems Inc. (PAY) at -31.11%; Walter Investment Management Company (WAC) at -26.24%; Apple Inc.-linked Fusion-IO, Inc. (FIO) at -25.65%.
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 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 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.