It's almost impossible to predict when a stock is going to make a huge move. But if you own shares of MSC Industrial (NYSE:MSM), Aerojet Rocketdyne (NYSE:AJRD), or PriceSmart (NASDAQ:PSMT), you'd do well to prepare yourself for potential volatility. That's because relatively high percentages of all three companies' shares have been sold short (meaning that traders are betting against the companies and believe that share prices will go down), and all three are expected to report earnings during the upcoming week.
When the two forces of short selling and earnings reports combine, big swings are almost always the result. The two stocks I singled out earlier this month, for instance, moved an average of 6% following their respective earnings releases.
Instead of getting stressed out by this prospect, I encourage investors to check out the slideshow below to sift through the noise and figure out what's really worth paying attention to over the long run.
Brian Stoffel has no position in any stocks mentioned. The Motley Fool recommends Costco Wholesale, MSC Industrial Direct, and PriceSmart. The Motley Fool owns shares of Costco Wholesale and MSC Industrial Direct. Try any of our Foolish newsletter services free for 30 days. 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.