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.
Navigating these stocks isn’t easy, which is why StockStory helps you find Comfort In Chaos. That said, here are three volatile stocks to avoid and some better opportunities instead.
Enpro (NPO)
Rolling One-Year Beta: 1.43
Holding a Guinness World Record for creating the world's largest gasket, Enpro (NYSE: NPO) designs, manufactures, and sells products used for machinery in various industries.
Why Is NPO Not Exciting?
- Flat sales over the last five years suggest it must find different ways to grow during this cycle
- Earnings per share were flat over the last two years and fell short of the peer group average
- Low returns on capital reflect management’s struggle to allocate funds effectively
Enpro’s stock price of $225.95 implies a valuation ratio of 26.8x forward P/E. Read our free research report to see why you should think twice about including NPO in your portfolio.
EnerSys (ENS)
Rolling One-Year Beta: 1.37
Supplying batteries that power equipment as big as mining rigs, EnerSys (NYSE: ENS) manufactures various kinds of batteries for a range of industries.
Why Are We Cautious About ENS?
- Declining unit sales over the past two years imply it may need to invest in improvements to get back on track
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 1.6%
- Low free cash flow margin of 4.2% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
EnerSys is trading at $124.13 per share, or 12.5x forward P/E. Dive into our free research report to see why there are better opportunities than ENS.
ArcBest (ARCB)
Rolling One-Year Beta: 1.62
Historically owning furniture, banking, and other subsidiaries, ArcBest (NASDAQ: ARCB) offers full-truckload, less-than-truckload, and intermodal deliveries of freight.
Why Should You Sell ARCB?
- Flat unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 28.1% annually, worse than its revenue
- Eroding returns on capital suggest its historical profit centers are aging
At $71.05 per share, ArcBest trades at 14.2x forward P/E. Check out our free in-depth research report to learn more about why ARCB doesn’t pass our bar.
High-Quality Stocks for All Market Conditions
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