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Why is Control4 So Volatile?

By Jason Moser – Mar 21, 2014 at 3:00PM

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Why does Control4's stock constantly make such big daily moves?

In this edition of The Motley Fool's "Ask a Fool" series, Motley Fool analysts Jason Moser and Brendan Mathews take a question from a reader who asks, "Is there any specific reason why Control4 (CTRL) is pretty volatile? Seems like it's up or down over 5% everyday!"

Jason points out that there are a couple of contributing factors to Control4's volatility. Number one is the fact that it's a small cap company that is playing into the beginning stages of a very big long-term trend in the smart home and the Internet of Things. Secondly, Control4 has a very small number of shares that float on the open market compared to other big tech companies like Google (GOOGL 2.16%) for example which means that the share price can be more subject to big swings.

Brendan Mathews owns shares of Google. Jason Moser owns shares of Control4. The Motley Fool recommends Google. The Motley Fool owns shares of Google. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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