The "neglected stock effect" is based on a well-known Wall Street adage that says to buy stocks when research on the stock is thin. This is based on a theory that analyst coverage inflates the current price of a stock and value still exists in companies flying under the analysts' radar.

These uncovered stocks often benefit from the over-performance pattern attributed to this "neglected stock effect."

There is a large universe of stocks not followed by analysts -- about 1,100 companies that trade on the three major exchanges (not including bulletin board stocks). This is the universe that Sabrient ranks for its Hidden Gems selections.