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2 Volatile Stocks with Competitive Advantages and 1 We Avoid

CSW Cover Image

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.

At StockStory, our job is to help you avoid costly mistakes and stay on the right side of the trade. That said, here are two volatile stocks with massive upside potential and one that might not be worth the risk.

One Stock to Sell:

Interactive Brokers (IBKR)

Rolling One-Year Beta: 1.83

Founded in 1977 and known for its sophisticated trading technology and global reach across 150+ exchanges in 34 countries, Interactive Brokers (NASDAQ: IBKR) is a global electronic broker that provides low-cost trading and investment services across stocks, options, futures, forex, bonds, and other financial instruments.

Why Are We Wary of IBKR?

  1. High net-debt-to-EBITDA ratio of 5× increases the risk of forced asset sales or dilutive financing if operational performance weakens

Interactive Brokers is trading at $71.46 per share, or 29.4x forward P/E. To fully understand why you should be careful with IBKR, check out our full research report (it’s free for active Edge members).

Two Stocks to Watch:

CSW (CSW)

Rolling One-Year Beta: 1.36

With over two centuries of combined operations manufacturing and supplying, CSW (NASDAQ: CSW) offers special chemicals, coatings, sealants, and lubricants for various industries.

Why Should You Buy CSW?

  1. Market share has increased this cycle as its 20.6% annual revenue growth over the last five years was exceptional
  2. Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 17.8% outpaced its revenue gains
  3. Robust free cash flow margin of 15.6% gives it many options for capital deployment, and its recently improved profitability means it has even more resources to invest or distribute

CSW’s stock price of $307.89 implies a valuation ratio of 25.6x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free for active Edge members .

UMB Financial (UMBF)

Rolling One-Year Beta: 1.19

With roots dating back to 1913 and a name derived from "United Missouri Bank," UMB Financial (NASDAQ: UMBF) is a financial holding company that provides banking, asset management, and fund services to commercial, institutional, and individual customers.

Why Are We Positive On UMBF?

  1. Market share has increased this cycle as its 17.8% annual net interest income growth over the last five years was exceptional
  2. Net interest margin expanded by 49 basis points (100 basis points = 1 percentage point) over the last two years, providing additional flexibility for investments
  3. Performance over the past five years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 20.4% outpaced its revenue gains

At $119.72 per share, UMB Financial trades at 1.2x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.

Stocks We Like Even More

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 6 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-micro-cap company Tecnoglass (+1,754% 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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