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Tampa-based managed health insurance giant WellCare's stock is one of the top performers in the region, with a price hovering around $120 a share.
But it could use some help with its stock symbol.
That's because Wellcare's symbol, WCG, is on a list of the top 100 least likable stock symbols, according to a new study co-authored by University of Alabama finance professor Xuejing Xing. The study, “What's a name worth? The impact of a likable stock ticker symbol on firm value,” was recently published in the Journal of Financial Markets.
The core of the research comes from nearly 2,000 undergraduate business students from the University of Central Florida. The group was asked to rank how much they like different three-letter symbols from various exchanges and how easily they think they can be pronounced in English.
The researchers, in the report, admit that at first glance “the notion that stock ticker symbols matter for firm value might appear at odds with conventional wisdom.”
But after the results came in and were analyzed, the authors of the study say they discovered “evidence of a significant relation between likable stock ticker symbols and firm value... Overall, our results are consistent with the notion that investors' feelings play a role in the pricing of financial assets.”
In sum, if it's a cool ticker, even without knowing the company, the value of the stock rises. If the symbol is chunky or hard to read, such as WellCare's WCG, the value of the shares could drop. (It helps that most of the middle letters on each of the most-liked symbols is a vowel.)
On a side note, it's too bad the survey stuck to three-letter stock symbols. If there were four letters, Tampa-based door manufacturer Masonite International Corp., with DOOR, would have certainly been on the most liked list.
The researchers end the report with a message to all investor relations and marketing executives: “We acknowledge that our results leave open an interesting question: If likable ticker symbols increase firm value on average, why is it not that all firms choose to adopt such symbols in the first place?”
Stock symbols
Examples from the list of most 100 likable stock symbols include:
Most Likable
Symbol Company
BED Bed, Bath & Beyond
BUD Anheuser-Busch InBev (maker's of Budweiser)
EAT Brinker (parent company of Chili's Grill & Bar and Maggiano's Little Italy restaurant brands.)
LUV Southwest Airlines (Airline is based at Love Field in Dallas.)
RAD Rite Aid
SAM Boston Beer Co. (Makers of Sam Adams)
Examples from the list of least 100 likable stock symbols include:
Least likable
Symbol Company
DTE DTE Energy Corp., based in Detroit
KFS Kingsway Financial Services
JWN Nordstrom (Co-founder is John W. Nordstrom)
SJI South Jersey Industries
WCG WellCare Health Plans
ZNH China Southern Airlines
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