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.
Navigating these stocks isn’t easy, which is why StockStory helps you find Comfort In Chaos. Keeping that in mind, here are three volatile stocks best left to the gamblers and some better opportunities instead.
Royal Caribbean (RCL)
Rolling One-Year Beta: 1.73
Established in 1968, Royal Caribbean Cruises (NYSE: RCL) is a global cruise vacation company renowned for its innovative and exciting cruise experiences.
Why Is RCL Risky?
- Sluggish trends in its passenger cruise days suggest customers aren’t adopting its solutions as quickly as the company hoped
- Poor free cash flow margin of 5% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Underwhelming 3.3% return on capital reflects management’s difficulties in finding profitable growth opportunities
At $280.15 per share, Royal Caribbean trades at 15.1x forward P/E. Read our free research report to see why you should think twice about including RCL in your portfolio.
Marriott Vacations (VAC)
Rolling One-Year Beta: 1.71
Spun off from Marriott International in 1984, Marriott Vacations (NYSE: VAC) is a vacation company providing leisure experiences for travelers around the world.
Why Are We Out on VAC?
- Demand for its offerings was relatively low as its number of conducted tours has underwhelmed
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
- High net-debt-to-EBITDA ratio of 7× increases the risk of forced asset sales or dilutive financing if operational performance weakens
Marriott Vacations is trading at $57.59 per share, or 7.8x forward P/E. To fully understand why you should be careful with VAC, check out our full research report (it’s free for active Edge members).
East West Bank (EWBC)
Rolling One-Year Beta: 1.33
As the largest independent bank in the U.S. focused on bridging financial services between America and Asia, East West Bancorp (NASDAQ: EWBC) operates a commercial bank that provides personal and business banking services with a unique focus on facilitating U.S.-Asia cross-border transactions.
Why Do We Think Twice About EWBC?
- Annual revenue growth of 3.6% over the last two years was below our standards for the banking sector
- Net interest margin dropped by 25.3 basis points (100 basis points = 1 percentage point) over the last two years, implying the firm’s loan book profitability fell as competitors entered the market
- Performance over the past two years shows its incremental sales were less profitable as its earnings per share were flat
East West Bank’s stock price of $114.43 implies a valuation ratio of 1.8x forward P/B. Dive into our free research report to see why there are better opportunities than EWBC.
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
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