Forbes Feature: High-Risk vs. Low-Risk Stock Picks

On May 27, 2020, Forbes interviewed ERS founder Raymond Mullaney and asked him to identify one high-risk stock and one low-risk stock using the ERS analytical platform. He identified Bristol-Myers (BMY) as high risk — with a Financial Risk Index (FRI) of 95 and a Price Risk Index (PRI) of 92 — and BorgWarner (BWA) as low risk, with an FRI of 22 and a PRI of 15.

One year later, BorgWarner had risen 58%, the S&P 500 had risen 38%, and Bristol-Myers had risen just 9%. The low-risk stock outperformed the market by 20 percentage points; the high-risk stock underperformed it by 29. As of April 2024, Bristol-Myers was down 7% from its May 2020 price while the S&P 500 was up 78%.