Investors Can Earn More by Investing Risky Stocks; Highlights of Five Basic Material Sector Risky Stocks – DAN, ZQK, GT, F, IP

  on Jan 28,2013 Posted in Finance ,Investment Ideas
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Beta value of a security is the gauge of the stock volatility in relation with the volatility of market. Beta is a simple and key indicator that all traders and investors should be aware of. Capital Asset Pricing Model (CAPM) is used to calculate beta value, which shows how much risk that one can take to receive a desirable return.

If Beta value is higher than one, so it shows that stock price movement tops market movement. Numerous fast growing, mid and small-capitalization stocks have beta over one. These securities have a tendency to offer superior return for high-risk taken, but some of them are less suitable for long-term investing. Investors also remember that very high beta value may show low liquidity causing lift in volatility.

Beta value knowledge is necessary from a trader’s perspective as numerous experts think that more than 70% of stock price movements are with respect to market changes. In this article we will discuss top five stocks of consumer goods sectors with higher beta value. We also used filter of market capitalization over two million in order to focus on high volume stocks.

Dana Holding Corporation (NYSE:DAN) leads the group of most volatile stocks among consumer goods sector. The corporation has the market capitalization of 2.45 billion while 148.10 million shares were outstanding. Beta factor, which measures the riskiness of the security, was recorded as 4.24. Net profit margin of the company was 3.84% while operating profit margin was 5.05%.

Quiksilver, Inc (NYSE:ZQK) has the market capitalization of 1.06 billion. The company has 165.93 million shares outstanding and 54% shares of the company were owned by institutional investors. ZQK has 0.53 value in price to sale ratio while price to book ratio was recorded as 1.83. The company earned $-10.76 million in previous year on revenue of $2.01 billion.

The Goodyear Tire & Rubber Company (NASDAQ:GT) has the market capitalization of 3.40 billion while its EPS was booked as 0.77. Goodyear Tire & Rubber Company has 244.96 million shares outstanding while 80% shares of the company were owned by institutions investors. In the profitability analysis, the company has operating profit margin of 1.92% while net profit margin was 1.25%. Beta value of the company was 2.63; beta is used to measure riskiness of the security.

Ford Motor Company (NYSE:F) was offering 2.92% dividend yield per annum. The auto maker has the market capitalization of 52.16 billion while 3.81 billion shares were outstanding. Ford offered Net profit margin of 13.36% while its operating profit margin was 4.85%. ROE was recorded as 142.46% while beta factor was 2.28.

International Paper Company (NYSE:IP) has beta value of 2.19. The company has the market capitalization of 18.67 billion. Return on assets ratio of the company was 2.54% while its return on equity ratio was 11.17%. ATR value of company was 0.67 while stock volatility for week was 1.14% while for month was 1.63%. Debt to equity ratio of the company was 1.49 and its current ratio was 1.80.

Disclosure: Opinions expressed in this article are those of the authors alone who have no stake in any stocks mentioned, and did not plan to acquire any stake within the next 72 hours.



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