Top 6 Most Volatile Stocks in 2022 Down More Than 45%
A volatile stock market, like today’s, can produce explosive returns. But, at the same time, it can also lead to catastrophic losses. Many of the most volatile stocks in 2022 have lost more than half their value.
Does this mean it’s time to invest? Not so fast. With recession fears rising and economic indicators slipping, there’s good reason to believe more fallout is on the way.
Despite bouncing back slightly this month, cryptocurrencies are still in a “crypto winter.” For example, the top two largest cryptos, Bitcoin (BTC) and Ethereum (ETH), are down over 50%.
Yet this is only the start. All major stock market indexes are down significantly. The S&P 500 (SPX) is down 17% YTD, while the tech-heavy Invesco QQQ Trust (NASDAQ: QQQ) is down 22%.
The fallout pushes investors to safer assets such as cash. That said, the U.S Dollar Index (DXY) is at an over 20-year high. Is it time to raise cash? For less risk, cash is ideal. However, digging through the most volatile stocks today can generate explosive returns in the long run
Below are the most volatile stocks in 2022 that are already down over 45%.
How to Find the Most Volatile Stocks
Finding the most fluctuating stocks in the market is not usually hard. They are often some of the most talked about stocks on social media, forums, etc. But if you wish to screen for high volatility stocks, a good place to start is by the stock’s beta.
According to an old Harvard Business Review article, a stock’s beta is “a company’s susceptibility to change in systematic factors such as the rate of inflation, Federal Reserve monetary policy, and world oil prices.”
Does any of this sound familiar? For one thing, inflation (as measured by the CPI index) rose over 9% YOY, its highest in over 40 years.
Not only that, but rising world oil prices are a significant driver in today’s inflation reading. Oil prices hit over $120 a barrel as the war in Ukraine escalated, and nations placed sanctions on Russian oil. And to curb soaring inflation, the Fed is raising interest rates while unloading its balance sheet at a record pace.
All of this is creating additional fluctuation in the markets. Some companies are more sensitive to these changes than others. Here’s a list of the top six most volatile stocks in 2022.
What Are the Top Six Most Volatile Stocks in 2022
Higher commodity prices can crush company margins. At the same time, higher interest rates can make debt more expensive. With this in mind, companies with higher amounts of debt and less established profits are more prone to volatility.
No. 6 FuelCell Energy (NASDAQ: FCEL)
- Beta: 4.22
After racing over 1700% from $1.58 to over $29 a share, FCEL’s stock price is back to around $3.50. FuelCell designs and builds fuel cells to produce clean hydrogen energy solutions.
Clean energy stocks rallied as President Biden’s promise of a greener future won a ticket into office. However, since hitting an ATH over $ 138, the Invesco WilderHill Clean Energy ETF (NYSE: PBW) is down 63%.
No. 5 Blink Charging (NASDAQ: BLNK)
- Beta: 3.76
Blink Charging is another company promising a cleaner future which has seen its stock price fall 70% from its ATH of $64.5.
At the same time, Blink is achieving record revenue as demand for EV charging heats up. The Infrastructure Investment and Jobs Act supplies $7.5B to build an EV charging network. Blink is likely to continue its momentum as one of the largest EV charging companies.
No. 4 Marathon Digital Holdings (NASDAQ: MARA)
- Beta: 4.79
Marathon is a crypto mining and holding company. With the total crypto market shedding over half its value this year, it’s no surprise MARA stock is down over 85%.
Meanwhile, the company’s primary focus is to hold Bitcoin as a long-term investment. If you wish to gain crypto exposure, MARA stock is one way to do it. However, keep in mind that the company must also pay working capital to continue the business.
No. 3 Gevo (NASDAQ: GEVO)
- Beta: 3.31
With a primary focus on turning renewable energy into clean fuel solutions, Gevo stock soared along with the industry. So far, Gevo expects to produce a billion gallons of hydrocarbons by 2030.
The company is scoring new supply agreements with top airlines to manage carbon emissions. Gevo is betting on capturing the growth as demand grows for sustainable fuel to hit its goal.
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Is It Worth Investing in the Most Volatile Stocks in 2022
If you are considering buying the most volatile stocks in 2022, there are a few things to keep in mind. For one thing, they can still go lower just because the stock price is down over 50% or more.
Furthermore, recession fears continue rising. With a higher-than-expected inflation report, another rate hike is likely at next week’s Fed meeting. Are the rate hikes too much, too late, like many are saying?
If so, it could tip the economy into a recession. During a downturn, volatile stocks can be seen as too risky, leading to more fallout.
Then again, for the long-term investor, it can allow buying at a discount compared to its average. For example, Amazon (NASDAQ: AMZN) and Apple (NASDAQ: AAPL) were known as some of the most volatile stocks before leading their industries to new heights.
For the less risk-averse investors, check out this step-by-step guide on what to invest in during a recession.
