2006-11-29 05:12:12 · 9 answers · asked by Anonymous in Business & Finance ➔ Investing
It is an oversophisticated way of saying the stock is a buy. The term comes from the concept of portfolio allocation theory, which in general states that a diversified portfolio will in the long run outperform a non-diversified portfolio. So in theoy in your portfolio you should have a little of this and a little of that. The overweight concept is that if you have a little more of this than that, you will improve your portfolio return.
Kind of stupid is my opinion of the term. If you overweight the stock, you are no longer as diversified. Oh well it is just a theory anyway.
2006-11-29 08:06:27 · answer #1 · answered by Anonymous · 0⤊ 1⤋
Actually it's a measure of how much 'weight' you should give a stock in your portfolio against its weight in the index.
Vodafone makes up approx 7% of the FTSE100 Index. If a broker rates Vodafone as 'equal weight' it means they think you should have about 7% of your personal portfolio invested in Vodafone. A rating of 'under weight' means you should have less than 7% and a rating of 'over weight' means you should have more than 7%.
2006-11-30 02:38:41 · answer #2 · answered by popeleo5th 5 · 0⤊ 0⤋
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2015-01-27 11:41:57 · answer #3 · answered by Anonymous · 0⤊ 0⤋
It basically means to what extent someone is invested in a particular sector of the market- like a mutual fund manager saying, "We are currently overweight in consumer cyclicals." Or, "We are currently underweight industrials."
In the case of overweight, it means he or she has a greater percentage of the portfolio in consumer cyclicals than he/she normally would. Vice versa for underweight.
2006-11-29 05:24:00 · answer #4 · answered by morlock825 4 · 0⤊ 0⤋
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2017-02-15 08:21:38 · answer #5 · answered by ? 3 · 0⤊ 0⤋
overweight
overweight" would typically mean that a stock is a better value than the other stocks the analyst covers in the same sector, while a stock that gets an "underweight" would be less attractive than other stocks in the same sector.
2006-11-29 05:22:22 · answer #6 · answered by drakoniumx 2 · 0⤊ 0⤋
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2006-11-29 11:39:34 · answer #7 · answered by Anonymous · 0⤊ 1⤋