There are nearly 9,000 publicly-traded stocks in the U.S. financial markets, but only one-third of them are followed at any one time by analysts or institutions. The other 6,000 or so stocks languish in a state of semi-neglect and tend to lack the trading liquidity of larger, better-known names. So is it ever wise to invest in a company that doesn't have any analyst coverage whatsoever?
According to Zacks Investment Research, "neglected stocks" represent a real opportunity for the diligent investor. For example, if you notice that a particular stock has recently picked up analyst coverage, or if you notice that more analysts are now carrying a bullish recommendation on a formerly neglected stock, that might be a signal to do your own research on the stock. As Zacks points out, though, be aware of analysts with overly aggressive growth forecasts for up-and-coming stocks. Sometimes those fixer-upper stocks never quite pan out the way they were supposed to -- like old "Slumpy" in the photo, they stick around as odd curiosities until someone can renovate them into something better.
For the TradeKing community: Do you have any favorite "neglected" stocks?
[image: All the King's Horses by Zunzuncito on Flickr]
