Stock market volatility is at its lowest levels in years, but that doesn't mean there aren't some volatile names out there. And as the investment adage goes, with high risk may come high reward.
Here we take a look at a few of the most volatile stocks of the past decade with a focus on larger capitalizations. Besides having high ten-year standard deviations in common, these names all have the upside that makes the risk is well worth taking.
Is it a Good Time to Buy Advanced Micro Devices Stock?
After Intel, Advanced Micro Devices (NASDAQ:AMD) is the largest manufacturer of microprocessors that are used to power our computing devices from desktops and laptops to smartphones and tablets. It is also a leader in graphic processors.
Advanced Micro Devices is coming off a strong 2020 and looks poised for another market-beating performance this year. The company wrapped up the year with 50%-plus top and bottom-line growth. What makes a 2021 run credible is the fact that the growth has been broad-based. AMD is firing on all cylinders these days with its computer, gaming, and server divisions all performing very well.
Its recent success has led to some impressive market share gains at the expense of Intel and other competitors. Some of the growth relates to elevated demand for desktops, laptops, and video game consoles from remote workers and housebound consumers during the pandemic. But there is likely some level of permanence to these trends.
Aside from AMD's exposure to high growth markets like PC's and mobile phones, it has another growth catalyst in its back pocket. Its $35 billion acquisition of semiconductor company Xilinx is expected to expand its addressable market to more than $100 billion. A bolstered product lineup (including Xilinx's defense industry offerings) should lead to more customers and unique cross-sell opportunities to keep this tech stock trending higher.
What is a Good Copper Stock?
In the materials sector, copper producer Freeport-McMoran (NYSE:FCX) is another volatile stock worth the bumpy ride. The company also owns gold and molybdenum assets around the world but it’s the copper resources that are its biggest growth opportunity.
With high-quality assets in Indonesia as well as North and South America, Freeport-McMoran is expected to benefit from not only rising metal prices but strong demand for copper. It plans to ramp production of "the red metal" this year amid increasing demand from electric vehicle (EV) manufacturers. Management forecasts it will sell some 3.8 billion pounds of copper this year. Why so much? Not only is copper used up to four times more in EVs than with internal combustion engines, but it also a main component of wind and solar energy systems.
The copper miner's value as a combination electric vehicle/renewable energy play is compelling. The U.S. and foreign governments alike are adopting policy after policy geared towards decarbonization. The use of copper in EV's will play a key role in realizing the world's carbon emission targets. Much of the demand will come from China, which is estimated to have more than 400 EV manufacturers.
Meanwhile, the supply side of the equation is also in Freeport-McMoran's favor. The global copper supply is aging, few mining projects are underway, and expansion projects are time-consuming. This plays into the hand of copper miners like Freeport-McMoran that have existing high quality, long life assets.
What also makes this stock worth owning is its dividend which will be reinstated next month. It amounts to less than a 1% yield, but it wouldn't be surprising to see the dividend payout increase over time as the balance sheet continues to improve.
Is First Solar Stock Worth the Risk?
First Solar (NASDAQ:FSLR) has been one of the most volatile stocks in recent years. Shares of the solar panel maker have had their ups and downs as investors have weighed the growth prospects with the cost-effectiveness of solar.
The outlook for First Solar is much brighter these days with solar power becoming more commonplace. As with Freeport-McMoran, global clean energy policies are the major growth catalyst. The world's renewable energy projects are expected to evolve from trendy solar systems installed by environmentally conscious neighbors to large-scale systems that reshape entire power grids.
And while plenty of solar technology challengers have emerged, First Solar holds some competitive advantages. Not only has it been around for longer than most, but its cadmium telluride technology is more energy efficient and less costly compared to more common technologies.
As we saw again last quarter, First Solar stock is sensitive to its quarterly earnings reports. It seems that some investors expect the company to hit it out of the park each time, but that's simply not realistic given the competitive pressures and impact of government regulation in the industry.
First Solar's strong project backlog and opportunity to capitalize on global renewable energy development are all the long-term investor needs to understand to make this a buy-and-hold. And with First Solar nearly 40% of its recent high, this is a shining example of a volatile stock worth buying.
Featured Article: Day Trading7 Healthcare Stocks Delivering Innovation in 2021
We all knew that traditional healthcare services were disrupted in 2020. The patient-doctor relationship went virtual. In the early months of the pandemic, many people in need of elective surgeries simply did not have that option available to them. And even local pharmacies took on a new e-commerce role as curbside pickup or home delivery of prescription medication became the norm.
Not surprisingly healthcare stocks were battered last year. Overall, the sector was down 11%, far below the S&P 500 Index that climbed over 15%.
However, the market is always forward-looking with a particular eye towards innovation. The healthcare sector has many companies that are developing innovative approaches in areas such as gene editing. And other companies are in late-stage trials for drugs that can deliver breakthrough results for conditions that continue to plague our world.
That’s the focus of this presentation. We’ve identified 7 healthcare stocks that are delivering innovative ideas that will help deliver better patient outcomes. And in some cases will revolutionize medicine altogether. These are also the stocks that analysts have their eye on.
View the "7 Healthcare Stocks Delivering Innovation in 2021"
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