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. That said, here is one volatile stock that could deliver huge gains and two that could just as easily collapse.
Two Stocks to Sell:
Marriott Vacations (VAC)
Rolling One-Year Beta: 1.54
Spun off from Marriott International in 1984, Marriott Vacations (NYSE: VAC) is a vacation company providing leisure experiences for travelers around the world.
Why Do We Think VAC Will Underperform?
- Number of conducted tours has disappointed over the past two years, indicating weak demand for its offerings
- Low returns on capital reflect management’s struggle to allocate funds effectively
- High net-debt-to-EBITDA ratio of 7× could force the company to raise capital at unfavorable terms if market conditions deteriorate
Marriott Vacations’s stock price of $80.40 implies a valuation ratio of 11.9x forward P/E. If you’re considering VAC for your portfolio, see our FREE research report to learn more.
Littelfuse (LFUS)
Rolling One-Year Beta: 1.73
The developer of the first blade-type automotive fuse, Littelfuse (NASDAQ: LFUS) provides electrical protection and control components for the automotive, industrial, electronics, and telecommunications industries.
Why Are We Out on LFUS?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 6% annually over the last two years
- Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Littelfuse is trading at $228.23 per share, or 23.4x forward P/E. To fully understand why you should be careful with LFUS, check out our full research report (it’s free).
One Stock to Buy:
Airbnb (ABNB)
Rolling One-Year Beta: 1.20
Founded by Brian Chesky and Joe Gebbia in their San Francisco apartment, Airbnb (NASDAQ: ABNB) is the world’s largest online marketplace for lodging, primarily homestays.
Why Do We Love ABNB?
- Nights and Experiences Booked have increased by an average of 10.4% annually, giving it the potential for margin-accretive growth if it can develop valuable complementary products and features
- Earnings per share grew by 49.4% annually over the last three years, massively outpacing its peers
- Strong free cash flow margin of 39.7% enables it to reinvest or return capital consistently
At $136.49 per share, Airbnb trades at 20.3x forward EV/EBITDA. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
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 Strong Momentum Stocks for this week. 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
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