Axon Enterprise (NASDAQ:AXON). AeroVironment (NASDAQ:AVAV). iRobot (NASDAQ:IRBT). Small, fast-growing industrial companies such as these, bringing disruptive technologies to market, are some of the most exciting stocks an investor can own -- but not always in a good way.
Over the years, our Motley Fool analysts have recommended each of these three companies multiple times because we believe their technologies -- stun guns and police body cameras, small drones, and robots -- are reshaping the world as we know it. Unfortunately, that didn't make any of these companies immune to today's broad-based stock market sell-off, which is being fueled by a mix of coronavirus fears and the steep plunge in crude oil prices.
In early trading today, Axon stock fell nearly 16%, while AeroVironment and iRobot each tumbled more than 10%. As of 10:30 a.m. EDT, Axon stock remains down 6.9%, AeroVironment is 7.6% lower, and iRobot has dropped 9.7%.
With no stock-specific news directly tied to any of these three companies over the weekend, or even as recently as this morning, it appears there are two culprits to blame for the sell-offs at Axon, AeroVironment, and iRobot: coronavirus and the steep drop in crude oil prices.
The respiratory illness now known as COVID-19 has taken the world -- and its stock markets -- by storm. Major benchmarks such as the Dow and Nasdaq fell in excess of 7% in early trading this morning as news filtered out regarding the disease's spread: Half of U.S. states now report infections. Italy has quarantined 16 million citizens. Global confirmed cases of the disease are now exceeding 110,000, and deaths have topped 3,800.
The sudden plunge in the price of oil is only adding to investors' unease.
It's definitely a scary time to invest, but try to keep in mind:
Aside from coronavirus and the oil-price drop, there is no other news that would explain why Axon, AeroVironment, and iRobot stocks specifically should be down today. Granted, a global phenomenon should affect stocks globally, and I cannot say that this sell-off is entirely unjustified. But even so, all three of these companies are growing quickly, profitable already, and prodigious producers of free cash flow.
When the virus passes and oil stabilizes, I expect all three to still be standing tall.