Penny stocks are volatile, and Valhi Inc. (NYSE:VHI) is proving so this week. At the time of writing, VHI stock is selling for $3.91 USD and is down almost 4% on the day.
Penny Stocks: Valhi Inc
Valhi Inc is an American holding company that operates through wholly and majority-owned subsidiaries. It has its hands in a number of different industries including industrial chemicals, security products, and waste management.
This week, VHI stock was riding high, seeing a peak of $4.47 USD on Monday that stretched until yesterday when a massive crash occurred. Dropping roughly 15% from $4.40 to $3.96 across the trading day, the Valhi penny stock paired some of those losses only to lose them again today.
So what’s going on? Is this just the volatility of penny stocks in practice? Or is the company doing something to warrant the crash?
Stock Crash
It seems that this is volatility in action! There does not appear to be any company news to spur on the stock dip, so it seems short-sellers took their profits and ran.
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But this is the magic of penny stocks because if we look at the company’s performance in 2019 so far, this penny stock has been on a skyward trajectory. According to Post Analyst, that has equated to growth of 122.28% so far this year.
Taking that into consideration, the latest dip may not be a deal breaker for any new investors. Just as with this week’s crash, there doesn’t seem to be a definitive reason for this growth either.
VHI stock started off January selling for less than $2 USD per share. If you bought in then, then your investment would still be delivering profits today.
So there you have it! A perfect example of why penny stocks can be so volatile. On more occasions than not, they need no reason to suddenly skyrocket or suddenly fall.
What do you think? Are you a penny stocks investor?
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