Dog is Wall Street jargon for a stock that underperforms or never goes up.
In the portfolio management system used by businesses to determine where to allocate resources, results of operating divisions are plotted on a two dimensional grid usually with growth rate on the vertical axis and profit margin or return on invested capital on the horizontal axis. Each of the quadrants has a name--
- Dog: low margin, low growth business. Usually to be sold or shut down.
- Cow: high margin, low growth business. The classical cash cow, usually maintained with profits diverted to support higher growth businesses.
- Star: high margin, high growth business. Keepers. The goal of every company is to accumulate these and guard them from competitors (or predators).
- Problem child: low margin, high growth business. Usually the business will grow into a Star or collapse to a Dog.
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- Cash cow
- Growth rate
- Operating division
- Porfolio management
- Problem child
- Profit margin
- Return on invested capital
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