Volatility cuts both ways - while it creates opportunities, it also increases risk, making sharp declines just as likely as big gains. This unpredictability can shake out even the most experienced investors.
Navigating these stocks isn’t easy, which is why StockStory helps you find Comfort In Chaos. That said, here are three volatile stocks to avoid and some better opportunities instead.
Atkore (ATKR)
Rolling One-Year Beta: 1.37
Protecting the things that power our world, Atkore (NYSE: ATKR) designs and manufactures electrical safety products.
Why Do We Think ATKR Will Underperform?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 31.5% annually, worse than its revenue
- Diminishing returns on capital suggest its earlier profit pools are drying up
At $69 per share, Atkore trades at 10.6x forward P/E. To fully understand why you should be careful with ATKR, check out our full research report (it’s free).
MRC Global (MRC)
Rolling One-Year Beta: 1.55
Producing bomb casings and tracks for vehicles during WWII, MRC (NYSE: MRC) offers pipes, valves, and fitting products for various industries.
Why Do We Avoid MRC?
- Annual sales declines of 2.9% for the past five years show its products and services struggled to connect with the market during this cycle
- Earnings per share have dipped by 33.4% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Underwhelming 0.9% return on capital reflects management’s difficulties in finding profitable growth opportunities
MRC Global’s stock price of $12.82 implies a valuation ratio of 10.9x forward P/E. Read our free research report to see why you should think twice about including MRC in your portfolio.
Flagstar Financial (FLG)
Rolling One-Year Beta: 1.25
Tracing its roots back to 1859 and rebranded from New York Community Bancorp in 2024, Flagstar Financial (NYSE: FLG) is a bank holding company that offers commercial and consumer banking services, with specialties in multi-family lending, mortgage originations, and warehouse lending.
Why Is FLG Risky?
- Annual sales declines of 22.8% for the past two years show its products and services struggled to connect with the market during this cycle
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 24.6% annually while its revenue grew
- Loan losses and capital returns have eroded its tangible book value per share this cycle as its tangible book value per share declined by 6.2% annually over the last five years
Flagstar Financial is trading at $11.51 per share, or 0.7x forward P/B. Dive into our free research report to see why there are better opportunities than FLG.
High-Quality Stocks for All Market Conditions
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
