One old trader used to say "High beta is bettah", meaning that a high beta on a stock is better for trading. Beta is the relation of the percentage change of a stock with that of the stock market as a whole. In other words, if a stock has a beta of 1, then the stock generally follows the market percent for percent. If it has a beta of zero, then there is no correlation, and if it has a beta of -1, then for each percentage move up in the market, the stock drops by a percentage and vice versa. However, if a stock has a beta of 2, then for each one percent increase in the market would return twice as much for the stock, in this case 2%.
So if you want to trade stocks, you might want to look for the ones with the high beta to get more bang for your buck. WallStreetNewsNetwork.com came up with a list of the stocks with the highest beta PLUS earnings and revenue growth in excess of 100% for the latest quarter. All of the stocks have market caps of more than $500 million. Here are the four stocks that met those filters and all have betas above 2.
- Ambac Financial Group, Inc. (ABK) Beta: +2.6 Rev. growth +667% EPS Growth +192%
- Harbin Electric, Inc. (NASDAQ:HRBN) Beta: +2.5 Rev. growth +128% EPS Growth +930%
- THQ Inc. (THQI) Beta: +2.3 Rev. growth +252% EPS Growth +110%
- Sotheby's (NYSE:BID) Beta: +2.2 Rev. growth +386% EPS Growth +225%
For other interesting lists of stocks including high income stocks, check out WallStreetNewsNetwork.com.
Disclosure: Author does not own any of the above.