The 9 Most Volatile Small-Caps for the Month

Jacob Harper |

While it’s not a definite rule of thumb, smaller companies tend to be a little more volatile than their larger counterparts. What is true for large companies is true for pretty much large anything: the bigger they are, the harder they are to move.

Small-cap stocks, or those worth between $300 million and $2 billion, tend to be popular with investors because they have the potential to break out with a rapid upswing (an advantage of smaller companies) while not having the distinct chance of completely crapping out unexpectedly (an advantage of larger companies.)

But there are still small-caps out there that experience wild up and downs, and have given more than a few day traders a conniption fit. These stocks tend to rack up an impressive amount of volume, as the volatility provides opportunity for massive profit – or massive loss. Either way, they make for a hell of a ride.

These are the nine small-caps that have experienced volatility over 10 percent over the past 30 days:

1)      Ariad Pharmaceuticals Inc. (ARIA) On Oct. 9 Ariad nosedived a whopping 75 percent after the FDA put a hold on trials for their leukemia drug ponatinib amid major safety concerns. Shares have rebounded significantly as the company has engaged in a “poison pill” defense, essentially admitting they are doomed.

2)      Bituato Holdings Limited (BITA) This Chinese internet marketing company that works closely with automotive industry was previously featured on Equities.com’s Hottest Chinese Small Caps list. The company has had a banner year, more than tripling in value. However, investors have become concerned that profits aren’t matching up with its robust revenue growth, rocking the stock.

3)      Geron Corporation (GERN) Geron benefited greatly from an upgrade on Oct 16, with MLV initiating coverage at a “buy.” Earlier in the month, the Menlo Park, Cal.-based biotech company experienced a pronounced downswing when they finished divested themselves from a stem cell trial.

4)      GW Pharmaceuticals plc (GWPH) Like Geron, British pharma GW was buoyed in October by a strong analyst forecast, this one from Canaccord Genuity, who raised their price target on the company’s shares to $26. The analyst’s report went on to call for exceptional revenue in 2014 from the company’s flagship drug, the multiple sclerosis treatment Sativex.

5)       INSYS Therapeutics , Inc. (INSY) This American biotech, who make an oral version of the powerful opiod fentanyl among other products,  gained ground all through the late summer before touching an all time high in early October, touching $49 a share on Oct 7. The company has corrected significantly over the last four weeks, shedding some 20 percent of its value. INSYS is set to deliver its third quarter earnings on November 12.

6)      China Ming Yang Wind Power Group Limited (MY) Like it says in their name, this company is in the wind power business. The company’s shares popped early in the month after they scored a big contract. The stock reached an all time before correcting.

7)      NetQin Mobile Inc. (NQ) Like Bitauto, NQ (nee Netqin) Mobile was included in the Hottest Chinese Small-Caps list. However, Netqin’s meteoric rise has been tempered greatly by a report from noted short-sellers Muddy Waters, who accuse the company of lying about their revenues and usage rates and call the company a “massive fraud.” The stock has rebounded some since the report first surfaced, but the company overall has been on an incredibly wild ride the last couple of weeks, posting double digit percentage losses and gains, sometimes in successive days.   

8)      Pretium Resources (PVG) This mineral mining company has been on a wild ride, as optimistic reports have been tamped down by the intitation of an investigation by Wolf Haldenstein, who allege the company made "false and misleading" statements about the extent of mineral reserves in some of their Canadian territory. Earlier in the month, an outside advisory firm resigned during a dispute over the Valley of the Kings Zone, saying there was absolutely no gold or minerals in the region and any statements made by Pretium saying otherwise are false.

9)      United Online, Inc. (UNTD) This Woodland Hills, Ca.-based tech company successfully spun off FTD Companies, and then performed a seven-to-one reverse stock split. United Online, which provides broadband services and the services Classmates Online and MyPoints, was formed in 2001 from the merger of NetZero and Juno Online Services.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
BITA Bitauto Holdings Limited American Depositary Share 20.74 -0.65 -3.04 633,395
ARIA ARIAD Pharmaceuticals Inc. 13.16 0.09 0.69 3,755,966
NQ NQ Mobile Inc. American Depositary Shares each rep 3.31 -0.09 -2.65 774,711
GERN Geron Corporation 2.01 0.05 2.55 727,954
PVG Pretium Resources Inc. (Canada) 9.25 0.48 5.47 1,769,410
MY China Ming Yang Wind Power Group n/a n/a n/a 0
INSY Insys Therapeutics Inc. 11.02 -0.11 -0.99 564,738
UNTD United Online Inc n/a n/a n/a 0
ITBFF iShares PLC - iShares USD Treasury Bond 1-3 Fund S 134.69 0.00 0.00 0
GWPH GW Pharmaceuticals Plc 112.32 3.04 2.78 578,112

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