Market swings can be tough to stomach, and volatile stocks often experience exaggerated moves in both directions. While many thrive during risk-on environments, many also struggle to maintain investor confidence when the ride gets bumpy.
These stocks can be a rollercoaster, and StockStory is here to guide you through the ups and downs. Keeping that in mind, here are two volatile stocks that could deliver huge gains and one that might not be worth the risk.
One Stock to Sell:
Petco (WOOF)
Rolling One-Year Beta: 1.70
Historically known for its window displays of pets for sale or adoption, Petco (NASDAQ: WOOF) is a specialty retailer of pet food and supplies as well as a provider of services such as wellness checks and grooming.
Why Is WOOF Risky?
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Earnings per share have dipped by 41% annually over the past four years, which is concerning because stock prices follow EPS over the long term
- High net-debt-to-EBITDA ratio of 8× increases the risk of forced asset sales or dilutive financing if operational performance weakens
At $3.08 per share, Petco trades at 22.2x forward P/E. Dive into our free research report to see why there are better opportunities than WOOF.
Two Stocks to Watch:
Graham Corporation (GHM)
Rolling One-Year Beta: 1.95
Founded when its founder patented a unique design for a vacuum system used in the sugar refining process, Graham (NYSE: GHM) provides vacuum and heat transfer equipment for the energy, petrochemical, refining, and chemical sectors.
Why Is GHM a Top Pick?
- Annual revenue growth of 15.6% over the past two years was outstanding, reflecting market share gains this cycle
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 645% over the last two years outstripped its revenue performance
- Free cash flow margin expanded by 6.5 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
Graham Corporation’s stock price of $52.75 implies a valuation ratio of 44.7x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
East West Bank (EWBC)
Rolling One-Year Beta: 1.12
As the largest independent bank in the U.S. focused on bridging financial services between America and Asia, East West Bancorp (NASDAQ: EWBC) operates a commercial bank that provides personal and business banking services with a unique focus on facilitating U.S.-Asia cross-border transactions.
Why Are We Positive On EWBC?
- Annual net interest income growth of 14% over the past four years was outstanding, reflecting market share gains this cycle
- Share repurchases over the last five years enabled its annual earnings per share growth of 12.7% to outpace its revenue gains
- Annual tangible book value per share growth of 11.6% over the last five years was superb and indicates its capital strength increased during this cycle
East West Bank is trading at $108.28 per share, or 1.8x forward P/B. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out 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 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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
