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In financial markets, underweight is a term used when rating stock by a financial analyst. A rating system may be three-tiered: "overweight," equal weight, and underweight, or five-tiered: buy, overweight, hold, underweight, and sell. Also used are outperform, neutral, underperform, and buy, accumulate, hold, reduce, and sell.
Underweight — In contrast to overweight holdings, if the broker advises that technology stocks should be "underweight," the recommendation to the investor is to hold less than 10% of the value of Technology shares. [citation needed] Equal weight - The third possibility is that the broker advises that technology stocks should have "equal ...
Equal-weight funds hold an equal proportion of each stock that makes up an index, which translates into a roughly 0.2 percent holding for each company in the S&P 500, for example.
A stock that is expected to outperform other stocks in its market sector gets an Overweight rating. Financial analysts who are employed by investment firms research stocks and provide their ...
Stock market indices may be categorized by their index weight methodology, or the rules on how stocks are allocated in the index, independent of its stock coverage. For example, the S&P 500 and the S&P 500 Equal Weight each cover the same group of stocks, but the S&P 500 is weighted by market capitalization, while the S&P 500 Equal Weight places equal weight on each constituent.
Price Action: BLUE stock is down 11.2% at $0.32 at last check Friday. Photo by Ground Picture on Shutterstock. Read Next: ... Equal-Weight. Underweight. View More Analyst Ratings for BLUE.
Overweight means you should increase your holdings because the stock is undervalued at this point. Underweight means you should decrease your holdings of this stock because it is overvalued. At least that's how I understood it.. —Preceding unsigned comment added by 63.107.135.125 21:35, 23 September 2008 (UTC)
Warner Bros. Discovery stock fell more than 2% in midday trading on Monday after Wells Fargo downgraded the stock from Overweight to Equal Weight, citing a "risky earnings setup" to kick off the year.