A highly volatile stock can deliver big gains - or just as easily wipe out a portfolio if things go south. While some investors embrace risk, mistakes can be costly for those who aren’t prepared.
Navigating these stocks isn’t easy, which is why StockStory helps you find Comfort In Chaos. Keeping that in mind, here are two volatile stocks that could reward patient investors and one best left to the gamblers.
One Stock to Sell:
Analog Devices (ADI)
Rolling One-Year Beta: 1.56
Founded by two MIT graduates, Ray Stata and Matthew Lorber in 1965, Analog Devices (NASDAQ: ADI) is one of the largest providers of high performance analog integrated circuits used mainly in industrial end markets, along with communications, autos, and consumer devices.
Why Does ADI Worry Us?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 13.8% annually over the last two years
- Efficiency has decreased over the last five years as its operating margin fell by 8.1 percentage points
- Low returns on capital reflect management’s struggle to allocate funds effectively, and its falling returns suggest its earlier profit pools are drying up
At $195.99 per share, Analog Devices trades at 25.6x forward price-to-earnings. Read our free research report to see why you should think twice about including ADI in your portfolio.
Two Stocks to Buy:
Samsara (IOT)
Rolling One-Year Beta: 2.26
One of the few public companies where Marc Andreessen is a Board member, Samsara (NYSE: IOT) provides software and hardware to track industrial equipment, assets, and fleets.
Why Is IOT a Top Pick?
- Customers view its software as mission-critical to their operations as its ARR has averaged 35% growth over the last year
- Expected revenue growth of 22.8% for the next year suggests its market share will rise
- Operating margin improvement of 19.3 percentage points over the last year demonstrates its ability to scale efficiently
Samsara’s stock price of $40.20 implies a valuation ratio of 14.6x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
Liquidity Services (LQDT)
Rolling One-Year Beta: 1.16
Powering what it calls the "circular economy" with over 5.5 million registered buyers across its platforms, Liquidity Services (NASDAQ: LQDT) operates online marketplaces that connect buyers and sellers of surplus assets, from consumer returns to industrial equipment to government property.
Why Are We Backing LQDT?
- Market share has increased this cycle as its 20.4% annual revenue growth over the last two years was exceptional
- Share repurchases over the last two years enabled its annual earnings per share growth of 23.5% to outpace its revenue gains
- Returns on capital are climbing as management makes more lucrative bets
Liquidity Services is trading at $31.78 per share, or 18.2x forward EV-to-EBITDA. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.
