February stock market recap: the most volatile stocks for you to watch
08:44, 25 February 2020
February has been a volatile month for stocks across the world, mostly influenced by the fear of a widespread coronavirus outbreak that could affect global economic performance for the upcoming years.
Apple recently announced that it will not be able to meet its quarterly revenue target due to the negative impact of coronavirus on its Chinese operations. The markets fear that this report will be the first of many, as corporations brace for the impact that this outbreak will have on their performance.
Furthermore, the most recent report on US retail sales indicated an unexpected 0.2 per cent decline, which may point to slower-than-expected economic growth on the horizon and there is expectation around the US GDP report that will be issued on Thursday, February 27, 2020.
So far, tech stocks are leading the charge with the Nasdaq returning to the outstanding 6.2 per cent month-to-date, followed by the S&P 500 delivering a 4.5 per cent MTD return and the MSCI World Index with a 4.1 per cent MTD return.
The market’s overall volatility measured by the CBOE Volatility Index (VIX) has been increasing recently, possibly due to coronavirus fears, and so far the index has escalated by 9.5 per cent since February 14. Let us find out what are the most volatile stocks of February 2020?
Most volatile stocks: biggest winners
Three stocks are leading February’s upward trend, delivering more than 20 per cent YTD returns for investors. These are:
- L Brands Inc – 28.15%
- Paycom Software Inc. – 21.64%
- Lennar Corp – 21.49%
Additionally, these other 5 stocks are delivering returns above 15 per cent:
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- PulteGroup Inc. – 18.58%
- TransDigm Group Inc. – 16.82%
- General Electric Co. – 15.95%
- Arista Networks Inc. – 15.56%
- D.R. Horton Inc. – 15.13%
Most volatile shares: biggest losers
These 4 stocks have experienced a significant slide in its prices throughout February:
- Technicolor – down 38.1%
- Fluor Corporation – down 18.5%
- Chesapeake Energy Corporation – down 13.7%
- ConAgra Foods – down 8.0%
Top 4 volatile stocks of February
The volatility caused by coronavirus and the fears associated with its mid-term economic impact has sent the price of some stocks spiralling downward or upward based on their exposure to the virus’ blowout.
Meanwhile, the IPO market is experiencing a heavy volume of new issues since market conditions have provided a favourable setup for companies looking to go public. These newly-introduced issues usually make it to the top of the list of current volatile stocks, especially when the underlying businesses are still yet to prove their worthiness.
Here is a list of the most volatile stocks in February.
Hexindai Inc. (HX)
Hexindai’s shares have been caught up in a downward path since late December when shares started to drop from a $0.95 peak to a range of $0.40 – $0.45 during the beginning of February.
One of the most influencing elements of this decline was a large revenue target miss in September 2019, when the company reported a 90.5 per cent Y/Y decline that has sent the stock on a downward spiral and its price has not been able to recover ever since.
The company’s Chairman and CEO recently stated that he believes that “the worst is behind us as the market environment continues to gradually improve and investor confidence returns”. The company recently reported an 83 per cent Y/Y decline in its net income by Q4 2019.
1Life Healthcare Inc. (ONEM)
1Life shares soared during its late January IPO, with stock prices hitting $22.07 at the closing bell, which resulted in a 22 per cent increase from its beginning price of $18.
The IPO’s aftermath led the stock upwards to reach an all-time high of $26.69, followed by a steep decline that sent the price to nearly $23 per share. As a result, the stock has delivered a 4 per cent MTD return.
The company’s volatility continues to be influenced by the market’s scepticism about the feasibility of its business model, as the company intends to revolutionise primary care by introducing a more user-friendly video-consultation experience, appointments that start punctually, and comfortable office environments where patients can be taken care of.
Westlake Chemical (WLK)
WLK shares have been dropping since mid-January when the price slid off a 2020 peak of $71.50 to end up at $59.67 and the stock is currently accumulating a 2.2 per cent MTD loss.
Westlake’s net income fell by 42 per cent during Q4 2019 due to lower sales on its most important product lines and the company has attributed this situation to slower global economic growth and the impact of international trade conflicts such as the China-US trade war.
The company is currently trading below its 5-day ($64.78) and 10-day ($64.25) simple moving averages and it shows a MACD level of -4.66 based on its performance for last month.
Reynolds Consumer Products (REYN)
The aluminum foil and plastic wrapping manufacturing company recently launched a successful IPO pricing its shares at $26. Since then the price has soared to nearly $31, satisfying investors’ expectations as a result.
The company plans to announce its Q4 results along with its year-end report for 2019 in March 2020 and investors are particularly excited about the company since it is already a profitable business that generated a net income of $135 million during the first three quarters of 2019.
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