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.
At StockStory, our job is to help you avoid costly mistakes and stay on the right side of the trade. That said, here is one volatile stock that could reward patient investors and two that could just as easily collapse.
Two Stocks to Sell:
Unity (U)
Rolling One-Year Beta: 2.18
Powering over half of the world's mobile games and expanding into industries from automotive to architecture, Unity (NYSE:U) provides software tools and services that allow developers to create, run, and monetize interactive 2D and 3D content across multiple platforms.
Why Do We Steer Clear of U?
- Billings have dropped by 2.5% over the last year, suggesting it might have to lower prices to stimulate growth
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 11.2%
- Suboptimal cost structure is highlighted by its history of operating margin losses
At $38.91 per share, Unity trades at 8x forward price-to-sales. Read our free research report to see why you should think twice about including U in your portfolio.
Fortune Brands (FBIN)
Rolling One-Year Beta: 1.11
Targeting a wide customer base of residential and commercial customers, Fortune Brands (NYSE:FBIN) makes plumbing, security, and outdoor living products.
Why Should You Dump FBIN?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 10.4 percentage points
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 5.3% annually while its revenue grew
Fortune Brands is trading at $47.11 per share, or 11x forward P/E. To fully understand why you should be careful with FBIN, check out our full research report (it’s free for active Edge members).
One Stock to Buy:
Broadcom (AVGO)
Rolling One-Year Beta: 2.06
Originally the semiconductor division of Hewlett Packard, Broadcom (NASDAQ:AVGO) is a semiconductor conglomerate spanning wireless communications, networking, and data storage as well as infrastructure software focused on mainframes and cybersecurity.
Why Do We Love AVGO?
- Annual revenue growth of 30% over the past two years was outstanding, reflecting market share gains this cycle
- Offerings are mission-critical for businesses and result in a best-in-class gross margin of 76.1%
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Broadcom’s stock price of $341.32 implies a valuation ratio of 41.3x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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
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