Least-loved stocks beat the favorites for 2006 (Rob Carrick)

I’m still havin’ too much fun with Burton Malkiel’s “Random Walk Down Wallstreet” and its “you can’t beat the market mantra”. Here is another supporting point 😛 Rob Carrick of the Globe & Mail set up a “Favorites – Strong Buy – Portfolio” vs. “Least Favourite – Sell – Portfolio” a year ago. In today’s Globe & Mail he announced the winner. It was “the sells” 😈

Least-loved stocks deserve more affection Out-of-favour companies often return more than analysts’ top picks, ROB CARRICK writes: “Here’s some help in deciphering analysts’ ratings on stocks: ”Strong buy” means be cautious, while ”underperform” or ”sell” can mean worthy of further investigation.One year ago, the Portfolio Strategy column set out to determine which stocks offered better returns, those with a top rating from analysts or those that are shunned. It wasn’t even close — the favoured stocks basically went nowhere as a group, while the out-of-favour stocks made a modest amount of money on average. […](Via Rob Carrick.)