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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 -0.60% ) for example which means that the share price can be more subject to big swings.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$2,821.03 (-0.60%) $-16.92
Control4 Stock Quote
Control4
CTRL

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