Theory suggested to explain how lesser known companies are sometimes able to generate higher returns on their stock than better known companies. The theory contends that lesser known companies tend to be smaller and therefore less likely to be analyzed by securities analysts due to their limited information. The better performance could also be tied to risks associated with investing in smaller companies as smaller companies can exhibit a higher relative growth percentage and can be at more risk of default than larger companies.
Related information about neglected firm effect:
- Neglected Firm Effect Definition | Investopedia
The neglected firm effect suggests that the lesser-known companies are able to generate higher returns on their stock shares, because they are less likely to be ...
- Neglected firm effect - Wikipedia, the free encyclopedia
The Neglected firm effect is the phenomenon of lesser-known firms producing abnormally high returns on their stocks. The companies that are followed by fewer ...
- Is There a Neglected-Firm Effect? Craig G. Beard and ... - JStor
The "neglected-firm effect" suggests that securities that analysts ignore offer higher returns (a ... Investors attempting to exploit the neglected-firm effect during ...
- Neglected Firm Effect - Financial Dictionary - The Free Dictionary
The tendency of firms that are neglected by security analysts to outperform firms that are the subject of considerable attention.
- What is neglected firm effect? definition and meaning
Definition of neglected firm effect: Theory suggested to explain how lesser known companies are sometimes able to generate higher returns on their stock than ...
- Neglected Firm Effect: Definition from Answers.com
tendency of stocks undiscovered by analysts and institutional investors to outperform the overall market because of the small Firm effect and to register.
- Is There A Neglected Firm Effect? - Wiley Online Library
effect, the small firm effect, the January effect, the neglected firm effect, and ... return effects, and secondly, that the neglected firm effect should be empirically ...
- Neglected firm effect Definition - NASDAQ.com
Neglected firm effect : read the definition of Neglected firm effect and 8000+ other financial and investing terms in the NASDAQ.com Financial Glossary.