Weekly Reputation Index Metrics
At the close of trading January 24, 2014, REPUVART and REPUVAR stood at 3384.38 and 2834.01 respectively. Over the past four weeks, the former has changed by -5.91%, while the latter has changed by -6.00%. The benchmark S&P500 Composite Index stood at 1559.38 (31 Dec 2001=1000) and has changed over the past four weeks by -2.78%. The current calendar year spread between REPUVAR and the S&P500 is -3.96%.
Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by 1.30% and -0.98% respectively; the S&P500 Composite Index has changed by 19.77%. The trailing 12-month spread between REPUVAR and the S&P500 is -20.75%.
Over the trailing 36 months, the REPUVART and REPUVAR have changed by 32.10% and 25.49% respectively; the S&P 500 Composite Index has changed by 38.66%.
The 4-week, trailing 12-month, and trailing 36-month returns for REPUSPX are -4.57%, 23.17%, and 81.36% respectively. The trailing 12-month spread between REPUSPX and the S&P500 is 3.41%.
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 1.72% and 24.15%.
Other interval changes in the magnitude of the indices are shown in the tables and charts below.
AnalysisIt’s looking as if the sugar high fueled by the Fed is wearing off. Emerging markets are suffering the most as their currency is devaluing, exacerbating the dollar performance of equities offered as ADRs. RepuStars Variety is sensitive to this pain, as is every other equity. In short, this is probably the start of a melt-down.
Prices have to move closer to rational expectations for earnings. At least for the start of the year, the least loser will be the winner. RepuStars Variety will reflect the broad global market through its ADR exposure; and RepuSPX will reflect the S&P500 which is a world unto itself.
The greatest gains in the RepuStars Variety (REPUVAR) portfolio for 2014 year are being reported by Newmont Mining Corp (NEM) in first place with returns of 3.88%. Silver Wheaton Corp is in second place with returns of 1.01% . Caesars Acquisition is in third with returns of 0.90%. 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 has not panned so far, Mobile TeleSystems OJSC (MBT) is down already -6.74%, Value SA (VALE) is down -6.45%, and Yanzhou Coal Mining (YZC) is down -5.78%)
Taking a quick stroll down memory lane, the worst losers last year have moved up slightly; Fusion I-O (FIO), wrapping up at an awful -59.31% moved up to -52.61%, CGG SA (CGG) is holding at -47.34%, and Royal Gold (RGLD) is up from-32.4% to -29.4%.
As for RepuSPX, the top three performers in a portfolio of 31 names are Newmont Mining (NEM) +3.88%, Northeast Utilities (NU) +0.47%, and SCANA Corp (SCG) +0.39%.
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). 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 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 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 above and below.)
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.