Cyclical companies are ones with volatile profits that fluctuate to extremes with the state of their industry or the greater economy.
Notoriously cyclical industries include automobiles, airlines, steel, natural gas, oil, refining, construction, dry bulk shipping, oil & gas service providers, financials, and hotels. Such companies typically have high fixed cost structures and narrow profit margins. Their share prices tend to swing in the same direction as the companies' profits, making for what can sometimes make for wild ride.
Related Fool Articles
Recent Mentions on Fool.com
- Oil Stocks: 3 Reasons Calumet Specialty Products Partners' Dividend Is Safe for Now
- Oil Stocks: 2 to Avoid, and 1 to Buy
- 3 Undervalued Stocks in Oil Worth Buying
- UBPR: Using Bank Reports to Find Great Bank Stocks
- These Mining Giants Are Throwing in the Towel; Are Iron Ore Prices at an Inflection Point?
- USAGX: Is This Fund for You?