Stockopedia’s ‘High Flyers’ are the stock market superstars. These companies tend to be the ones that fund managers jostle and barter over. They are high quality, growing stocks with a history of beating estimates - and Inspired Energy (LON:INSEI) is one of them.
Inspired Energy is a small cap stock in the Business Support Services industry. When we analyse Inspired Energy from a factor perspective, we find that it has a Quality Rank of 92, a Momentum Rank of 84, but a Value Rank of only 33. This is the classic factor profile of a High Flyer.
A combination of high quality, high momentum and low value is great when earnings go up but a bad place to be when things go wrong.
What kind of High Flying stock is Inspired Energy?
So, High Flyers tend to be riskier and more volatile than the market average. But is this true of Inspired Energy?
We can find out quickly by applying Stockopedia’s RiskRatings system, which splits the stock market into five buckets according to stock price volatility. The five classifications (from least to most volatile) are:
Inspired Energy is an adventurous stock. This means that the group is in the more volatile half of the market in terms of stock price volatility, as might be expected of a High Flyer. Those looking to invest here should prepare themselves for a potentially bumpy ride.
That said, we can see from Inspired Energy’s above average five-year return on capital employed figure of 20.4% that the group has been highly profitable over multiple years. This suggests that Inspired Energy can back up its favourable factor exposures and volatility characteristics with some kind of economic moat.
Disclaimer: These articles are provided for information purposes only. The content is not intended to be a personal recommendation. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser. The author has no position in the stocks mentioned, unless otherwise stated.