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.
At StockStory, our job is to help you avoid costly mistakes and stay on the right side of the trade. That said, here are three volatile stocks to steer clear of and a few better alternatives.
Marvell Technology (MRVL)
Rolling One-Year Beta: 3.08
Moving away from a low margin storage device management chips in one of the biggest semiconductor business model pivots of the past decade, Marvell Technology (NASDAQ: MRVL) is a fabless designer of special purpose data processing and networking chips used by data centers, communications carriers, enterprises, and autos.
Why Does MRVL Give Us Pause?
- Sales tumbled by 1.3% annually over the last two years, showing market trends are working against its favor during this cycle
- Historical operating losses point to an inefficient cost structure
- Push for growth has led to negative returns on capital, signaling value destruction, and its falling returns suggest its earlier profit pools are drying up
Marvell Technology’s stock price of $58.96 implies a valuation ratio of 22x forward P/E. Check out our free in-depth research report to learn more about why MRVL doesn’t pass our bar.
Carnival (CCL)
Rolling One-Year Beta: 1.74
Boasting outrageous amenities like a planetarium on board its ships, Carnival (NYSE: CCL) is one of the world's largest leisure travel companies and a prominent player in the cruise industry.
Why Should You Sell CCL?
- Sizable revenue base leads to growth challenges as its 4% annual revenue increases over the last five years fell short of other consumer discretionary companies
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 16.9% annually while its revenue grew
- Negative returns on capital show management lost money while trying to expand the business
Carnival is trading at $19.74 per share, or 10.8x forward P/E. Dive into our free research report to see why there are better opportunities than CCL.
Belden (BDC)
Rolling One-Year Beta: 1.35
With its enamel-coated copper wire used in WWI for the Allied forces, Belden (NYSE: BDC) designs, manufactures, and sells electronic components to various industries.
Why Do We Think Twice About BDC?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.7% annually over the last two years
- Anticipated sales growth of 4.3% for the next year implies demand will be shaky
- Flat earnings per share over the last two years lagged its peers
At $103.53 per share, Belden trades at 14.3x forward P/E. Read our free research report to see why you should think twice about including BDC in your portfolio.
Stocks That Overcame Trump’s 2018 Tariffs
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.
