What Are Big Uglies?

Big uglies is a slang term used for large, older companies operating in hard, so-called “dirty,” industries such as manufacturing, oil, steel, and mining. These types of stocks tend to be unpopular with younger 澳洲幸运5开奖号码历史查询:investors, with their generally dogged, steady returns and resistance to volatility often being overlooked in favor of more exciting, higher-growth companies on the cutting edge of an industry.

Over the years, the criteria of what constitutes a big ugly have broadened. Nowadays, the term commonly refers to all kinds of out-of-favor 澳洲幸运5开奖号码历史查询:investments. Big uglies are generally household names with a stable market share ♔in establi🐓shed industries

Understanding Big Uglies

Big uglies traditionally denoted stocks in the manufacturing and infrastructure industries. As technology has advanced, the term has gradually loosened and is now more all-encompassing of any company in any unfashionable sector.

Being unpopular means big uglies typically trade at low 澳洲幸运5开奖号码历史查询:price-to-earnings (P/E) and 澳洲幸运5开奖号码历史查询:price-to-book (P/B) ratios, putting them firmly in the value category of investing. However, many investors prefer to chase the higher returns potentially provided by the racier, more saturated parts of the 澳洲幸运5开奖号码历史查询:stock market. Investors who want to make lots of money or have 澳洲幸运5开奖号码历史查询:short-term goals may not be interested in big uglies because they simply don't experience enough 澳洲幸运5开奖号码历史查询:quarterly growth.

Examples of Big Uglies

In technology, hardware makers and connectivity stocks are considered old-fashioned and therefore are also considered big uglies. In the finance industry, the term can be used to describe stable, large 澳洲幸运5开奖号码历史查询:commercial and 澳洲幸运5开奖号码历史查询:retail banks. Most 澳洲幸运5开奖号码历史查询:utilities are considered big uglies, too, as are traditional 澳洲幸运5开奖号码历史查询:consumer products.

Many big uglies are 澳洲幸运5开奖号码历史查询:multinational corporations (MNC) that over the years have had to broaden their offerings. Because they are tapped into several different continents and client bases, their revenues tend to be limited because it i🎉s unlikely that all end markets will simultaneously be profitable.

Advantages and Disadvantages of Big Uglies

Although the name brings negative connotations, big uglies can be an important part of an investor's balanced 澳洲幸运5开奖号码历史查询:portfolio. Big uglies tend to experience slow but steady 澳洲幸运5开奖号码历史查询:long-term growth, earnings, and 澳洲幸运5开奖号码历史查询:dividends and are usually household names with robust 澳洲幸运5开奖号码历史查询:brand recognition.

These characteristics might not appease investors eager to 澳洲幸运5开奖号码历史查询:time the market and generate high returns from trading stocks. However, big uglies can meet all of the requirements for those investors who are looking for long-term value at affordable prices. Every portfolio should arguably contain a handful of lower-risk, more staꩵble stocks. While they might not provide bumper returns, investors can generally know what to expect when they invest in big uglies.

The case for including big uglies in a portfolio is particularly strong in times of economic hardship. During 澳洲幸运5开奖号码历史查询:recessions and periods of volatility, big uglies have proved to be effective at churning out profits and retaining support. In this way, they can help to hold down a portfolio and curb losses when other racier, overcrowded stocks get pummelled in a 澳洲幸运5开奖号码历史查询:bear market.

However, what this kind of 澳洲幸运5开奖号码历史查询:diversification does offer in return is reassurance. For example, a downturn in one market country can be offset by favꦺorable economic conditions in other market countries. Likewise, problematic manufacturing conditions in one plant can be offset by normal manufacturing conditions in another. 

Special Considerations

While there is certainly a case to be made for investing in big uglies, young investors with long time horizons and big 澳洲幸运5开奖号码历史查询:financial goals to meet before 澳洲幸运5开奖号码历史查询:retirement might want to refrain from including⭕ too ma🥀ny of them in their portfolios.

Like any other investment, big uglies require 澳洲幸运5开奖号码历史查询:due diligence. Some large, stable, and old companies may be in 澳洲幸运5开奖号码历史查询:structural declineꦯ, serving industries that are dying out and being replaced. That means that while they might have been steady in the past, the future could have different outcomes

Not all companies that fall into the big uglies category fare well during recessions. In reality, industries such as manufacturing, oil, steel, and mining are very 澳洲幸运5开奖号码历史查询:capital intensive and, by nature, actually quite cyclical.