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.
These stocks can be a rollercoaster, and StockStory is here to guide you through the ups and downs. Keeping that in mind, here is one volatile stock that could reward patient investors and two that might not be worth the risk.
Two Stocks to Sell:
Bath and Body Works (BBWI)
Rolling One-Year Beta: 1.46
Spun off from L Brands in 2020, Bath & Body Works (NYSE:BBWI) is a personal care and home fragrance retailer where consumers can find specialty shower gels, scented candles for the home, and lotions.
Why Are We Cautious About BBWI?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Forecasted revenue decline of 5% for the upcoming 12 months implies demand will fall even further
- Earnings per share have contracted by 5.3% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance
Bath and Body Works is trading at $22.85 per share, or 9x forward P/E. To fully understand why you should be careful with BBWI, check out our full research report (it’s free).
Caleres (CAL)
Rolling One-Year Beta: 1.26
The owner of Dr. Scholl's, Caleres (NYSE:CAL) is a footwear company offering a range of styles.
Why Do We Pass on CAL?
- Lackluster 3.8% annual revenue growth over the last five years indicates the company is losing ground to competitors
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
- 7× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
At $13.86 per share, Caleres trades at 13.2x forward P/E. Check out our free in-depth research report to learn more about why CAL doesn’t pass our bar.
One Stock to Buy:
Distribution Solutions (DSGR)
Rolling One-Year Beta: 1.23
Founded in 1952, Distribution Solutions (NASDAQ:DSGR) provides supply chain solutions and distributes industrial, safety, and maintenance products to various industries.
Why Is DSGR a Top Pick?
- Impressive 15.1% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Healthy unit economics are reflected in its 33.6% gross margin and give it more money to invest in marketing and R&D
- Earnings per share grew by 34.8% annually over the last two years and trumped its peers
Distribution Solutions’s stock price of $29.74 implies a valuation ratio of 19x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even 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 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.