Vertex Energy Inc (NASDAQ:VTNR) has an average trading volume of over 2 million, so it is no slouch of a stock in terms of interest.
Vertex engages in recycling industrial waste streams and off-specification commercial chemical products. The firm focuses on recycling used motor oil and other petroleum by-products.
Since the start of the year, the stock's performance has been pretty remarkable compared to some tech giants, motor and EV stocks that dominate media channels.
Vertex has increased by 100%. Microsoft Corporation (NASDAQ:MSFT) has decreased by 20%.
Apple Inc (NASDAQ:AAPL) has decreased by 15%.
Tesla Inc (NASDAQ: TSLA) has decreased by 25%.
Amazon.com, Inc. (NASDAQ:AMZN) has decreased by 18%.
NVIDIA Corporation (NASDAQ:NVDA) has decreased by 38%.
Ford Motor Company (NYSE:F) has decreased by 32%.
Nio Inc (NYSE:NIO) has decreased by 43%.
General Motors Company (NYSE:GM) has decreased by 38%.
XPeng Inc (NASDAQ:XPENG) has decreased by 53%.
However, if we take a closer look at Vertex, how good is the stock's performance?
Below, I have the monthly time frame.
This price data goes back to its IPO price of $3,000 in 1992. It surged to its all-time high of $7,125 in 1993. The price plummeted to below $20 by 1997 and has barely recovered since. There have been moments where the price sparked to life, such as in 2000 when the price peaked at $480 and in 2004 at $114.
It does not take much evaluation to see that this is a stock that has a poor history of performance, leaving investors frustrated.
Let's compare the monthly time frame of Vertex to Microsoft, which paints a very different picture of what a good stock looks like.
Despite the 20% decline since the start of this year, which is likely to be nothing more than a pullback/correction before the next surge higher, the price of Microsoft has seen a 10,000% increase in price since Vertex's IPO.
Now, if you like the Warren Buffett approach and are looking for undervalued stocks that have huge upside potential, this may be one of them, but the stock's history shows the odds are very much against you.
You may be holding this for a very long time before the price starts returning a profit. Who has the time?
Stocks that have a history of trending well and are creating new all-time highs have a much higher chance of returning a profit in a far more reasonable time frame of 12 to 24 months.
The moral of the story is: don't get caught up in short-term price swings. Instead, look for stocks that have a proven history of performance.
Trend following trumps undervalued stocks for the busy everyday person managing their portfolio from home and seeking consistent returns on their hard-earned money.