Looking for a contrarian investing idea? Well, if you are, you might be interested to know of the extremely positive news coverage for Johnson Outdoors Inc. (NASDAQ:JOUT), especially when compared to other companies in the Consumer Products industry.
Trading on Investor Herd Behavior
There have been academic studies that show investors tend to place too much importance on recent information, also known as psychological anchoring.
During periods of negative news, investors may continue to sell a stock, pushing it below its fair value. Conversely, during periods of positive news, investors may get overly optimistic and push the stock beyond fair value.
This is the goal of Contextuall: to identify examples where herd behavior has reached extreme levels.
We believe that, by identifying these areas of one-sided sentiment, investors could use these contrarian signals as a starting point for their own research.
Analyzing Media Sentiment for Johnson Outdoors Inc. (JOUT)
14.71% of headlines have been classified as Negative (vs. an industry average of 13.33%).
Considering the extreme optimism behind the stock, and our note on herd behavior, what do you think of the stock's outlook? Have investors become too bullish?