Is Axcelis Technologies, Inc. (NASDAQ: ACLS) a volatile title?

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If you own shares in Axcelis Technologies, Inc. (NASDAQ: ACLS), you need to think about how this contributes to the volatility of your portfolio. In finance, beta is a measure of volatility. Volatility is considered a measure of risk in modern financial theory. Investors may think that volatility is divided into two main categories. The first category is company-specific volatility. This can be handled by limiting your exposure to a particular title. The second type is the broader volatility of the market, which can not be diversified because it stems from macroeconomic factors that directly affect all stocks in the market.

Some stocks closely mimic market volatility, while others have moderate, exaggerated or uncorrelated price movements. Beta can be a useful tool for understanding how an equity is influenced by market risk (volatility). However, Warren Buffett said that "volatility is far from being risky" in his 2014 letter to investors. Thus, although useful, the beta is not the only measure to take into account. To use the beta version as an investor, you must first understand that the market is endowed with a beta version. A stock whose beta is less than one is less volatile than the market, is more volatile but not correlated to the market in general. In comparison, a stock with a beta greater than 1 tends to move in the same direction as the market in the long run, but with larger price changes.

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What does the ACLS beta value mean to investors?

Given its beta of 1.2, we can assume that the share price Axcelis Technologies has been quite sensitive to the volatility of the market (over the past 5 years). Based on the past, Axcelis Technologies' shares can be expected to rise faster than the markets in times of optimism, but fall more rapidly in times of pessimism. Stock price volatility is worth considering, but most long-term investors believe the story of earnings growth and earnings growth is more important. Take a look at Axcelis Technologies' rates in this regard, below

NasdaqGS: ACLS Income Statement, March 14, 2019

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Could ACLS size increase volatility?

With a market capitalization of US $ 661 million, Axcelis Technologies is a small-cap share. However, it is important enough to attract the attention of professional investors. It is quite common to see a small cap stock with a beta higher than one. In part, it is because relatively few investors can influence the price of a small business compared to a large one.

What does this mean for you?

Beta only tells us that the Axcelis Technologies share price is sensitive to broader market movements. This could indicate that it is a business with high growth or strongly influenced by sentiment because it is speculative. Alternatively, it could have an operational leverage in its business model. In the end, beta is an interesting metric, but there is still a lot to learn. To fully understand if ACLS are a good investment for you, we also need to consider important fundamentals of the company, such as the financial performance and financial health of Axcelis Technologies. I urge you to continue your research by examining the following:

  1. Future prospects: What do industry analysts expect to know about the future growth of ACLS? Check out our free research report on analyst consensus on ACLS perspectives.
  2. antecedents: Has the ACLS always performed well regardless of the ups and downs of the market? Go into more detail in past performance analysis and look at free visual representations of ACLS history for clarity.
  3. Other interesting actionsIt is useful to check how ACLS compares to other companies in terms of evaluation. You can start with this free list of potential options.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Our goal is to provide you with a long-term research analysis based on fundamental data. Note that our analysis may not take into account the latest price sensitive business announcements or qualitative information.

If you notice an error that needs to be corrected, please contact the publisher at editorial-team@simplywallst.com. This article from Simply Wall St is of a general nature. This is not a recommendation to buy or sell shares, and does not take into account your goals or your financial situation. Simply Wall St has no position on the actions mentioned. Thanks for the reading.

"data-reactid =" 52 "> Our goal is to provide you with a long-term, targeted research analysis based on fundamental data.Please note that our analysis may not take into account the latest announcements of price sensitive companies or qualitative information.

If you notice an error that needs to be corrected, please contact the publisher at editorial-team@simplywallst.com. This article from Simply Wall St is of a general nature. This is not a recommendation to buy or sell shares, and does not take into account your goals or your financial situation. Simply Wall St has no position on the actions mentioned. Thanks for the reading.