This refers to any stock that has fallen out of favour with the general investing community. As a result, these stocks are sparsely traded in the market and their price is usually quite low compared to their earnings and underlying assets. Many stocks that were popular among investors in the past may turn into wallflowers after bad news that destroyed investors’ enthusiasm to buy them. This causes their prices to drop and reflect the dull future prospects of the stock. In some cases, companies that are unpopular among investors may later attract more attention with increasing coverage by large institutional investors.
