Weekly Reputation Index Metrics
At the close of trading August 17, 2012, REPUVART and REPUVAR stood at 2883.47 and 2486.34 respectively. Over the past four weeks, the former has changed by 5.34%, while the latter has changed by 5.28%. The benchmark S&P500 Composite Index stood at 1235.24 (31 Dec 2001=1000) and has changed over the past four weeks by 4.07%.
Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by 25.17% and 23.52% respectively; the S&P500 Composite Index has changed by 26.22%. Since January 2009, the REPUVART and REPUVAR have changed by 130.43% and 116.49% respectively; the S&P 500 Composite Index has changed by 52.20%.
Other interval changes in the magnitude of the indices are shown below.
AnalysisEurope seems to be coming to its senses, the US economy may be growing, inflation may be creeping, and it may be Christmas. But the markets are open to risk and willing to discover the implied value in companies previously underappreciated. Consequently, equity markets have again widened the spread between RepuStars Variety and the S&P500 to 3.56%, at the same time, the RepuStars-selected S&P500 spread, a pocket index, has grown significantly with a year-to-date return of 22.4% and a spread over the S&P500 of 11.9%
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 Constellation Brands (STZ) with a year-to-date climb of 54.54%. American Eagle Outfitters (AEO) moves down to the #2 slot with a year-to-date return of 52.35%. Staying in third place is Vertex Pharmaceuticals (VRTX) at 50.87% 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 greatest disappointments this year remain the energy and mining concerns. To date, the bottom three are are Walter Energy, Inc. (WLT) at -44.99%, Federal-Mogul Corporation (FDML) at -39.94%, and AuRico Gold Inc. (USA) at -23.58%
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.