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.
These stocks can be a rollercoaster, and StockStory is here to guide you through the ups and downs. That said, here is one volatile stock that could reward patient investors and two that might not be worth the risk.
Two Stocks to Sell:
American Outdoor Brands (AOUT)
Rolling One-Year Beta: 1.25
Spun off from Smith and Wesson in 2020, American Outdoor Brands (NASDAQ: AOUT) is an outdoor and recreational products company that offers outdoor and shooting sports products but does not sell firearms themselves.
Why Is AOUT Risky?
- Sales stagnated over the last five years and signal the need for new growth strategies
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
American Outdoor Brands’s stock price of $8.35 implies a valuation ratio of 38x forward P/E. If you’re considering AOUT for your portfolio, see our FREE research report to learn more.
Mettler-Toledo (MTD)
Rolling One-Year Beta: 1.12
With roots dating back to the precision balance innovations of Swiss engineer Erhard Mettler, Mettler-Toledo (NYSE: MTD) manufactures precision weighing instruments, analytical equipment, and product inspection systems used in laboratories, industrial settings, and food retail.
Why Are We Cautious About MTD?
- Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last two years
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Efficiency has decreased over the last two years as its adjusted operating margin fell by 1.4 percentage points
Mettler-Toledo is trading at $1,390 per share, or 31.1x forward P/E. Dive into our free research report to see why there are better opportunities than MTD.
One Stock to Buy:
Magnite (MGNI)
Rolling One-Year Beta: 2.05
Born from the 2020 merger of Rubicon Project and Telaria, Magnite (NASDAQ: MGNI) operates the world's largest independent sell-side advertising platform that automates the buying and selling of digital advertising inventory across all channels and formats.
Why Is MGNI a Top Pick?
- Annual revenue growth of 30.2% over the past five years was outstanding, reflecting market share gains this cycle
- MGNI is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its improved cash conversion implies it’s becoming a less capital-intensive business
- Improving returns on capital suggest its past investments are beginning to deliver value
At $16.50 per share, Magnite trades at 17.1x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in 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 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.
