Exploring Stockopedia’s rankings recently, I felt a guilty temptation. A quick screen revealed that there were only 40 UK shares classified as Falling Stars. On that list were quite a few shares I’ve often thought I’d like to own.

For example, at the time of writing, the two largest companies on the Falling Stars list are drinks group Diageo (LON:DGE) and tool hire giant Ashtead (LON:AHT).

Other big names that caught my eye included Spirax (LON:SPX), Croda International (LON:CRDA) and Howden Joinery (LON:HWDN). And there were more. You can see the current list here.

Many of these companies have seen big share price falls in recent times:

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Browsing through the list, I felt sure that some of them ought to offer value at current levels…

Did I hit buy and add any of these Falling Stars to my portfolio? More on that shortly. But first, I want to consider the type of company we’re likely to find labelled as a Falling Star and take a closer look at their historic performance.

Is there any data to support a more positive stance on these out-of-favour stocks?

Once again, my thanks go to Alex for crunching the numbers and producing these excellent charts.

What’s a Falling Star?

Falling Stars are a losing StockRank Style in the Stockopedia system:

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Falling Stars are often glamour shares that have fallen out of fashion – often because their growth has stalled.

You can read a more detailed review here, but in short they tend to have low StockRanks and be characterised by a high quality rank, but low value and momentum scores.

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For contrast, here’s an overview of the average StockRank and factor scores for the current crop of Super Stocks:

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I think there probably are some long-term opportunities among the Falling Stars. But I also think there’s a Buffett quote that covers this situation:

I don’t look to jump over seven-foot bars; I look around for one-foot bars that I can step over…

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