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 deliver huge gains and two that might not be worth the risk.
Two Stocks to Sell:
Zillow (ZG)
Rolling One-Year Beta: 1.23
Founded by Expedia co-founders Lloyd Frink and Rich Barton, Zillow (NASDAQ: ZG) is the leading U.S. online real estate marketplace.
Why Do We Avoid ZG?
- Annual revenue declines of 7.6% over the last five years indicate problems with its market positioning
- Poor expense management has led to operating losses
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Zillow’s stock price of $67.06 implies a valuation ratio of 36.5x forward P/E. Dive into our free research report to see why there are better opportunities than ZG.
Johnson Controls (JCI)
Rolling One-Year Beta: 1.33
Founded after patenting the electric room thermostat, Johnson Controls (NYSE: JCI) specializes in building products and technology solutions, including HVAC systems, fire and security systems, and energy storage.
Why Do We Pass on JCI?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Estimated sales growth of 2.9% for the next 12 months is soft and implies weaker demand
- Low returns on capital reflect management’s struggle to allocate funds effectively
At $97.21 per share, Johnson Controls trades at 25.4x forward P/E. To fully understand why you should be careful with JCI, check out our full research report (it’s free).
One Stock to Watch:
DXP (DXPE)
Rolling One-Year Beta: 1.80
Founded during the emergence of Big Oil in Texas, DXP (NASDAQ: DXPE) provides pumps, valves, and other industrial components.
Why Could DXPE Be a Winner?
- Operating margin improvement of 5.6 percentage points over the last five years demonstrates its ability to scale efficiently
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 34.6% exceeded its revenue gains over the last two years
- Rising returns on capital show management is finding more attractive investment opportunities
DXP is trading at $89.76 per share, or 16.3x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out 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 176% over the last five years.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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.
