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. Keeping that in mind, here are three volatile stocks to avoid and some better opportunities instead.
Floor And Decor (FND)
Rolling One-Year Beta: 1.14
Operating large, warehouse-style stores, Floor & Decor (NYSE:FND) is a specialty retailer that specializes in hard flooring surfaces for the home such as tiles, hardwood, stone, and laminates.
Why Are We Out on FND?
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Performance over the past three years shows its incremental sales were much less profitable, as its earnings per share fell by 8.3% annually
- Underwhelming 8.8% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its shrinking returns suggest its past profit sources are losing steam
At $63.01 per share, Floor And Decor trades at 32.9x forward P/E. Read our free research report to see why you should think twice about including FND in your portfolio.
Newmark (NMRK)
Rolling One-Year Beta: 1.39
Founded in 1929, Newmark (NASDAQ:NMRK) provides commercial real estate services, including leasing advisory, global corporate services, investment sales and capital markets, property and facilities management, valuation and advisory, and consulting.
Why Should You Sell NMRK?
- Sales trends were unexciting over the last five years as its 10.3% annual growth was below the typical consumer discretionary company
- Negative free cash flow raises questions about the return timeline for its investments
- ROIC hasn’t moved, making investors question whether its recent investments can increase profitability
Newmark’s stock price of $17.43 implies a valuation ratio of 10.1x forward P/E. Check out our free in-depth research report to learn more about why NMRK doesn’t pass our bar.
Guardant Health (GH)
Rolling One-Year Beta: 1.33
Pioneering the field of "liquid biopsy" with technology that can identify cancer-specific genetic mutations from a simple blood draw, Guardant Health (NASDAQ:GH) develops blood tests that detect and monitor cancer by analyzing tumor DNA in the bloodstream, helping doctors make treatment decisions without invasive biopsies.
Why Does GH Fall Short?
- Issuance of new shares over the last five years caused its earnings per share to fall by 18.5% annually while its revenue grew
- Cash-burning history makes us doubt the long-term viability of its business model
- Negative earnings profile makes it challenging to secure favorable financing terms from lenders
Guardant Health is trading at $101.61 per share, or 11.7x forward price-to-sales. If you’re considering GH for your portfolio, see our FREE research report to learn more.
Stocks We Like More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out 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 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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