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 that may be too risky for most investors and some better opportunities instead.
Impinj (PI)
Rolling One-Year Beta: 1.98
Founded by Caltech professor Carver Mead and one of his students Chris Diorio, Impinj (NASDAQ:PI) is a maker of radio-frequency identification (RFID) hardware and software.
Why Does PI Worry Us?
- Products and services resonate with customers, evidenced by its respectable 8.6% annualized sales growth over the last two years
- Historical operating margin losses point to an inefficient cost structure
- Push for growth has led to negative returns on capital, signaling value destruction
Impinj’s stock price of $184.39 implies a valuation ratio of 75.1x forward P/E. Read our free research report to see why you should think twice about including PI in your portfolio.
Marriott Vacations (VAC)
Rolling One-Year Beta: 1.95
Spun off from Marriott International in 1984, Marriott Vacations (NYSE:VAC) is a vacation company providing leisure experiences for travelers around the world.
Why Are We Bearish on VAC?
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Marriott Vacations is trading at $108.05 per share, or 10.6x forward P/E. If you’re considering VAC for your portfolio, see our FREE research report to learn more.
Saia (SAIA)
Rolling One-Year Beta: 1.33
Pivoting its business model after realizing there was more success in delivering produce than selling it, Saia (NASDAQ:SAIA) is a provider of freight transportation solutions.
Why Does SAIA Give Us Pause?
- Underwhelming tons shipped over the past two years indicate demand is soft and that the company may need to revise its strategy
- Earnings per share have dipped by 16.3% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Waning returns on capital imply its previous profit engines are losing steam
At $341.13 per share, Saia trades at 26.9x forward P/E. Check out our free in-depth research report to learn more about why SAIA doesn’t pass our bar.
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