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 is one volatile stock that could deliver huge gains and two that might not be worth the risk.
Two Stocks to Sell:
Skyworks Solutions (SWKS)
Rolling One-Year Beta: 1.39
Result of a merger of Alpha Industries and the wireless communications division of Conexant, Skyworks Solutions (NASDAQ: SWKS) is a designer and manufacturer of chips used in smartphones, autos, and industrial applications to amplify, filter, and process wireless signals.
Why Should You Dump SWKS?
- Sales tumbled by 12.2% annually over the last two years, showing market trends are working against its favor during this cycle
- Forecasted revenue decline of 8.5% for the upcoming 12 months implies demand will fall even further
- Efficiency has decreased over the last five years as its operating margin fell by 19.2 percentage points
At $72.85 per share, Skyworks Solutions trades at 18.4x forward P/E. Read our free research report to see why you should think twice about including SWKS in your portfolio.
Semtech (SMTC)
Rolling One-Year Beta: 2.23
A public company since the late 1960s, Semtech (NASDAQ: SMTC) is a provider of analog and mixed-signal semiconductors used for Internet of Things systems and cloud connectivity.
Why Do We Avoid SMTC?
- Persistent operating margin losses and eroding margin over the last five years point to its preference for growth over profits
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 6.8 percentage points
- Push for growth has led to negative returns on capital, signaling value destruction, and its falling returns suggest its earlier profit pools are drying up
Semtech is trading at $42.30 per share, or 23.7x forward P/E. To fully understand why you should be careful with SMTC, check out our full research report (it’s free).
One Stock to Watch:
HubSpot (HUBS)
Rolling One-Year Beta: 1.32
Started in 2006 by two MIT grad students, HubSpot (NYSE: HUBS) is a software-as-a-service platform that helps small and medium-sized businesses market themselves, sell, and get found on the internet.
Why Are We Positive On HUBS?
- Billings growth has averaged 19.7% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
- Software is difficult to replicate at scale and results in a stellar gross margin of 84.8%
- Robust free cash flow margin of 18.3% gives it many options for capital deployment
HubSpot’s stock price of $537.59 implies a valuation ratio of 8.9x forward price-to-sales. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
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 Strong Momentum Stocks for this week. 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).
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