C. HUYGENS - Tuesday, June 17, 2014
Weekly Reputation Index Metrics
At the close of trading June 13, 2014, REPUVART and REPUVAR stood at 3716.76 and 3084.58 respectively. Over the past four weeks, the former has changed by 1.68%, while the latter has changed by 1.49%. The benchmark S&P500 Composite Index stood at 1686.43 (31 Dec 2001=1000) and has changed over the past four weeks by 3.10%. The current calendar year spread between REPUVAR and the S&P500 is -3.63%.
Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by 10.40% and 8.20% respectively; the S&P500 Composite Index has changed by 18.32%. The trailing 12-month spread between REPUVAR and the S&P500 is -10.12%.
Over the trailing 36 months, the REPUVART and REPUVAR have changed by 40.02% and 32.67% respectively; the S&P 500 Composite Index has changed by 50.34%.
The 4-week, trailing 12-month, and trailing 36-month returns for REPUSPX are 1.33%, 13.21%, and 91.24% respectively. The trailing 12-month spread between REPUSPX and the S&P500 is -5.11%.
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 1.39% and 5.01%.
Other interval changes in the magnitude of the indices are
shown in the tables and charts below.
Huygens has signaled his discomfort for more than a year, and while he is not a bear in the sense that he does not short the market, he remains uncomfortable. He is not alone, but he and his peers who do short the market are being derided.
Take this opening paragraph from Bloomberg’s
Callie Bost late last week: “For five years it’s been the fate of American short sellers to be wrong, as the biggest rally since the Internet bubble steamrolled defensive trades. They’re loading up again, sending bearish wagers..." The market continues to rally, and one has to wonder if the bearish bets are among the causes. "'Those short-sellers will have to cover and that actually can help push markets higher,” Kate Warne, a St. Louis-based investment strategist at Edward Jones, which oversees $787 billion, said in a June 4 interview at Bloomberg’s headquarters in New York.”
Market fundamentals and sentiment, like gravity, are forces to be reckoned with. In the meantime, turning to the quantitative metrics, the greatest gains in the RepuStars Variety portfolio for 2014 year are being reported by
Weatherford Intl. Ltd (WFT) is in first place with returns of 52.35% for the year; Cavium Inc (CAVM) is in second place with returns of 49.02% for the year; and Rite Aid Corporation (RAD) is third first place with returns of 28.09% for the year.
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, Inc. (PCYC) is trailing the entire portfolio with returns of -31.39% for the year; VistaPrint Limited (VPRT) is second from last place with returns of -20.13% for the year; and Staples, Inc. (SPLS) is third from last with returns so far this year of -19.58%.
Turning to RepuSPX whose constituents are limited to the S&P500 members, the top three performers in a portfolio of 35 names are
Pepco Holdings, Inc. (POM) is in first place with returns of 46.04% for the year; Garmin Ltd. (GRMN) is in second place with returns of 29.66% for the year; and Entergy Corporation (ETR) is in third place with returns of 27.92% for the year.
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
flow and/or follow Twitter missives at #ReputationRisk.
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.