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. That said, here are three volatile stocks best left to the gamblers and some better opportunities instead.
Quest Resource (QRHC)
Rolling One-Year Beta: 1.24
Recycling corporate waste to help companies be more sustainable, Quest Resource (NASDAQ: QRHC) is a provider of waste and recycling services.
Why Should You Dump QRHC?
- Sales were flat over the last two years, indicating it’s failed to expand this cycle
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 9 percentage points
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
At $2.22 per share, Quest Resource trades at 6.3x forward P/E. Check out our free in-depth research report to learn more about why QRHC doesn’t pass our bar.
Standex (SXI)
Rolling One-Year Beta: 1.29
Holding over 500 patents globally, Standex (NYSE: SXI) is a manufacturer and distributor of industrial components for various sectors.
Why Do We Think Twice About SXI?
- Flat sales over the last two years suggest it must find different ways to grow during this cycle
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 5.9% annually
- Free cash flow margin dropped by 3.2 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Standex’s stock price of $150.83 implies a valuation ratio of 17.1x forward P/E. If you’re considering SXI for your portfolio, see our FREE research report to learn more.
CDW (CDW)
Rolling One-Year Beta: 1.12
Serving as a crucial bridge between technology manufacturers and end users since 1984, CDW (NASDAQ: CDW) is a multi-brand provider of information technology solutions that helps businesses and public sector organizations select, implement, and manage hardware, software, and IT services.
Why Do We Pass on CDW?
- Sales tumbled by 3.5% annually over the last two years, showing market trends are working against its favor during this cycle
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 1.5%
- Flat earnings per share over the last two years lagged its peers
CDW is trading at $185.72 per share, or 19x forward P/E. To fully understand why you should be careful with CDW, check out our full research report (it’s free).
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 183% over the last five years (as of March 31st 2025).
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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
