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. Keeping that in mind, here are three volatile stocks best left to the gamblers and some better opportunities instead.
Stitch Fix (SFIX)
Rolling One-Year Beta: 2.02
One of the original subscription box companies, Stitch Fix (NASDAQ: SFIX) is an online personal styling and fashion service that curates personalized clothing selections for customers.
Why Do We Steer Clear of SFIX?
- Sluggish trends in its active clients suggest customers aren’t adopting its solutions as quickly as the company hoped
- 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
At $4.23 per share, Stitch Fix trades at 15x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than SFIX.
THOR Industries (THO)
Rolling One-Year Beta: 1.16
Created through the acquisition and merger of various RV manufacturers, THOR Industries manufactures and sells a range of recreational vehicles, including motorhomes and travel trailers, catering to consumers seeking the freedom and comfort of the RV lifestyle.
Why Is THO Risky?
- Annual sales declines of 7.2% for the past two years show its products and services struggled to connect with the market during this cycle
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
- Eroding returns on capital suggest its historical profit centers are aging
THOR Industries is trading at $100.93 per share, or 24.7x forward P/E. If you’re considering THO for your portfolio, see our FREE research report to learn more.
Mercury General (MCY)
Rolling One-Year Beta: 1.18
Founded in 1961 and maintaining a network of over 6,300 independent agents across the country, Mercury General (NYSE: MCY) is an insurance company that primarily sells automobile insurance policies through independent agents in 11 states, with a strong focus on California.
Why Are We Hesitant About MCY?
- Estimated sales growth of 2.4% for the next 12 months implies demand will slow from its two-year trend
- Annual book value per share growth of 3.3% over the last five years was below our standards for the insurance sector
- ROE of 8.4% reflects management’s challenges in identifying attractive investment opportunities
Mercury General’s stock price of $91.57 implies a valuation ratio of 2.1x forward P/B. To fully understand why you should be careful with MCY, check out our full research report (it’s free for active Edge members).
Stocks We Like More
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 Growth Stocks for this month. 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
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