Market swings can be tough to stomach, and volatile stocks often experience exaggerated moves in both directions. While many thrive during risk-on environments, many also struggle to maintain investor confidence when the ride gets bumpy.
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 to avoid and some better opportunities instead.
Covenant Logistics (CVLG)
Rolling One-Year Beta: 1.08
Started with 25 trucks and 50 trailers, Covenant Logistics (NASDAQ: CVLG) is a provider of expedited long haul freight services, offering a range of logistics solutions.
Why Is CVLG Risky?
- Annual sales declines of 3% for the past two years show its products and services struggled to connect with the market during this cycle
- Earnings per share have contracted by 17% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- Free cash flow margin dropped by 25 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Covenant Logistics’s stock price of $23.27 implies a valuation ratio of 6.6x forward EV-to-EBITDA. If you’re considering CVLG for your portfolio, see our FREE research report to learn more.
Clover Health (CLOV)
Rolling One-Year Beta: 1.45
Founded in 2014 to improve healthcare for America's seniors through technology, Clover Health (NASDAQ: CLOV) provides Medicare Advantage plans for seniors with a focus on affordable care and uses its proprietary Clover Assistant software to help physicians manage patient care.
Why Are We Wary of CLOV?
- Annual sales declines of 28.7% for the past two years show its products and services struggled to connect with the market during this cycle
- Customer growth was choppy over the past two years, suggesting that increasing competition is causing challenges in landing new contracts
- Cash burn makes us question whether it can achieve sustainable long-term growth
Clover Health is trading at $3.10 per share, or 42.4x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why CLOV doesn’t pass our bar.
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio 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 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.
