Weekly Reputation Index Metrics
At the close of trading October 4, 2013, REPUVART and REPUVAR stood at 3647.74 and 3072.22 respectively. Over the past four weeks, the former has changed by 2.57%, while the latter has changed by 2.47%. The benchmark S&P500 Composite Index stood at 1472.46 (31 Dec 2001=1000) and has changed over the past four weeks by 2.13%.
Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by 18.68% and 16.25% respectively; the S&P500 Composite Index has changed by 15.71%. Over the trailing 36 months, the REPUVART and REPUVAR have changed by 106.43% and 59.31% respectively; the S&P 500 Composite Index has changed by 51.53%.
Other interval changes in the magnitude of the indices are shown below.
AnalysisIt’s hard to one-up the summary from the Financial Times Lex column. “The US is closed for business. Europe cannot fix its broken currency. China is slowing, Japan is at walking pace, and India keeps on being India. “ What’s a market to do? "With stock markets artificially inflated by the boundless generosity – otherwise known as quantitative easing – of the US Federal Reserve and other central banks..." REPUSPX is still going gangbusters, and RepuStars Variety is uncharacteristically at par for the trailing twelve months.
REPUSPX’s returns for the trailing twelve months are down to 37.23% for a 21.56% spread over the corresponding return from the S&P500. For the calendar year to date, the returns are at 40.41% for a spread of 24.81% over the corresponding S&P500 return. RepuStars Variety (REPUVAR) increased its spread loss for the year to date to -3.4% on an increased return of 12.2% for the calendar year and decreased returns of 16.37% for the trailing twelve months for 0.69% spread over the S&P500.
The greatest gains in the portfolio for the year are being reported by GameStop Corp (GME), which holds on to first place with returns of 104.44%. Swappping places again are Wellpoint (WLP) moving up to second with year to date returns of 47.09%, and Michael Kors Holdings moving down to third with year to date reuturns of 46.18%. 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 Royal Gold (RGLD) slips back to last, but moves up slightly to -39.01, Fusion I-O (FIO) is up at -37.34% for the year, and CGG SA (CGG) becomes third last at -27.42% for the year as Veriphone (PAY) moves up the ranks!
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 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 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.