Q: Can you please shed some Light on why Hammond is such a volatile trader? Aside from the big drop after earnings there are big swings in price on no news.
Thank you
Thank you
5i Research Answer:
HPS.A is up 32% year-to-date, and 121% on a one-year timeframe, and it has a volatility level of 51 which is somewhat high. The stock has exhibited the current levels of volatility over the past two years, but it has been mostly up and to the right, and so the volatility is less noticeable. The current correction is similar to the correction from August 2023, and stocks are usually volatile when they are attempting to bottom, as essentially the stock is exchanging holders (investors taking profits as others accumulate).
As investors continue to buy and sell the stock until a floor price is achieved, the stock may be volatile in between, but this is typical trading behaviour, particularly on stocks which can double in a year.