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 are three volatile stocks to avoid and some better opportunities instead.
Asure Software (ASUR)
Rolling One-Year Beta: 1.09
Operating in the often-overlooked smaller metropolitan markets where HR expertise can be scarce, Asure Software (NASDAQ: ASUR) provides cloud-based human capital management software and services that help small and medium-sized businesses manage payroll, taxes, time tracking, and HR compliance.
Why Does ASUR Worry Us?
- Revenue increased by 14.3% annually over the last three years, acceptable on an absolute basis but tepid for a software company enjoying secular tailwinds
- Products, pricing, or go-to-market strategy may need some adjustments as its 7.1% average billings growth over the last year was weak
- Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 3.2 percentage points
At $7.83 per share, Asure Software trades at 1.4x forward price-to-sales. Dive into our free research report to see why there are better opportunities than ASUR.
HP (HPQ)
Rolling One-Year Beta: 1.29
Born from the legendary Silicon Valley garage startup founded by Bill Hewlett and Dave Packard in 1939, HP (NYSE: HPQ) designs and sells personal computers, printers, and related technology products and services to consumers, businesses, and enterprises worldwide.
Why Should You Dump HPQ?
- Sales were flat over the last five years, indicating it’s failed to expand this cycle
- Projected sales growth of 1.6% for the next 12 months suggests sluggish demand
- Sales over the last two years were less profitable as its earnings per share fell by 2% annually while its revenue was flat
HP is trading at $28 per share, or 8.4x forward P/E. Check out our free in-depth research report to learn more about why HPQ doesn’t pass our bar.
Insight Enterprises (NSIT)
Rolling One-Year Beta: 1.30
With over 35 years of IT expertise and partnerships with more than 8,000 technology providers, Insight Enterprises (NASDAQ: NSIT) provides end-to-end digital transformation solutions that help businesses modernize their IT infrastructure and maximize the value of technology.
Why Are We Out on NSIT?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 7.2% annually over the last two years
- Earnings per share lagged its peers over the last two years as they only grew by 2.8% annually
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
Insight Enterprises’s stock price of $124.07 implies a valuation ratio of 12.2x forward P/E. Read our free research report to see why you should think twice about including NSIT in your portfolio.
High-Quality Stocks for All Market Conditions
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