Weekly Reputation Index Metrics
At the close of trading July 13, 2012, REPUVART and REPUVAR stood at 2739.10 and 2363.50 respectively. Over the past four weeks, the former has changed by 2.10%, while the latter has changed by 1.95%. The benchmark S&P500 Composite Index stood at 1181.78 (31 Dec 2001=1000) and has changed over the past four weeks by 1.04%.
Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by -2.23% and -3.64% respectively; the S&P500 Composite Index has changed by 3.09%. Since January 2009, the REPUVART and REPUVAR have changed by 118.90% and 105.80% respectively; the S&P 500 Composite Index has changed by 45.61%.
Other interval changes in the magnitude of the indices are shown below.
AnalysisWith more than half the year under the belt, it is clear that much is not clear. Sovereigns come in two flavors: too much risk or too little reward. Plan B, for those seeking security and modest returns, are the major indices. As a result, the S&P500 is no longer indexing the broad market which makes it a less than ideal benchmark for many, and a disastrous component of market-neutral hedge fund strategies. Even so, RepuStars Variety continues to outperform the S&P500 for the calendar year.
Turning to companies who appear to have been undervalued at the start of this calendar year, the greatest gains in the 2012 RepuStars portfolio are being reported by Vertex Pharmaceuticals (VRTX) with a year-to-date climb of 47.48%. Still in second place, American Eagle Outfitters (AEO) takes the prize returning for the year 46.13%. New to the #3 slot is Constellation Brands at 39.28% for the year. These are three of the 38 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, the three greatest disappointments this year to date are Walter Energy, Inc. (WLT) at -43.27%, Coeur d’Alene Mines (CDE) at -40.01%, and Gulfport Energy (GPOR) at -39.57%.
Side Note: A description of the 2012 portfolio constituents can be obtained here: click here.
BackgroundThe RepuStars® Variety Corporate Reputation Index calculated by Dow Jones Indexes is the first-ever composite equity index based on a quantitative value strategy informed by the Steel City Re corporate reputation ranking metrics. The metrics comprise non-financial indicators of reputational value. 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 their metrics as measured by Steel City Re’s proprietary Corporate Reputation Rank™, which tracks 7000 companies weekly. In using the RepuStars Index as an investment strategy, investors can take advantage of this price disparity. The principles behind Steel City Re's reputation metrics are discussed in the book, Mission:Intangible (see below).
The RepuStars indices are reconstituted annually in the first week of January and posted by Dow Jones Indexes in the third week. The Indices were last reconstituted 20 Jan 2012. Click here for additional information on the index.
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 first Friday of every month or read the book, Mission: Intangible. Managing risk and reputation to create enterprise value, 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.