Business, Legal & Accounting Glossary
An orphan stock is a stock that is not preferred by investors. It has essentially been abandoned or forgotten. If a stock is considered small or in an out-of-favour sector, it may be ignored in this way. An orphan stock is also called a wallflower stock because it is so easily overlooked. As a result of being ignored, an orphan stock may trade at a low price-to-earnings ratio, which illustrates what investors are willing to pay per dollar of earnings. The low P/E of an orphan stock usually indicates the earnings aren’t worth much. Still, some investors view an orphan stock as an undiscovered bargain rather than an unfavourable investment. Should an investor take a risk and purchase an orphan stock, he may enjoy a high return on the investment – if the orphan stock is rediscovered.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Orphan Stock are sourced/syndicated and enhanced from:
This glossary post was last updated: 6th February, 2020