High Flier

AAA

DEFINITION of 'High Flier'

A stock that has seen its share price - and subsequently its valuation - rise to high multiples on metrics such as current earnings and current sales. Usually, the rise will happen quickly, with the stock well outpacing the gains in the overall market during the same time period. Also, higher levels of volatility are usually found in high-flying stocks to go along with frequent spikes in trade volume.

INVESTOPEDIA EXPLAINS 'High Flier'

Many internet stocks were high fliers in the late 1990s, even though most had never turned a net profit. Investors were sold on the story of what kind of money the companies could earn in the future based on the ultra-rapid growth rates seen at the time.

Many high-flying stocks tumble quickly; expectations can get well ahead of actual revenues and profits and as soon as a chink in the armour appears, short-term investors leave the stock in droves, sending shares plummeting.

RELATED TERMS
  1. Earnings Per Share - EPS

    The portion of a company's profit allocated to each outstanding ...
  2. Dash To Trash

    When investors flock to a class of securities or other assets, ...
  3. Speculation

    The act of trading in an asset, or conducting a financial transaction, ...
  4. Spike

    1) The comparatively large upward or downward movement of a price ...
  5. Volatility

    1. A statistical measure of the dispersion of returns for a given ...
  6. Volume

    The number of shares or contracts traded in a security or an ...
Related Articles
  1. Which Mutual Fund Market Cap Suits You?
    Mutual Funds & ETFs

    Which Mutual Fund Market Cap Suits You?

  2. How The Power Of The Masses Drives The ...
    Active Trading Fundamentals

    How The Power Of The Masses Drives The ...

  3. The Financial Markets: When Fear And ...
    Active Trading

    The Financial Markets: When Fear And ...

  4. Mad Money ... Mad Market?
    Active Trading Fundamentals

    Mad Money ... Mad Market?

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center