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.
Navigating these stocks isn’t easy, which is why StockStory helps you find Comfort In Chaos. Keeping that in mind, here is one volatile stock that could deliver huge gains and two that could just as easily collapse.
Two Stocks to Sell:
Steven Madden (SHOO)
Rolling One-Year Beta: 1.23
As seen in the infamous Wolf of Wall Street movie, Steven Madden (NASDAQ: SHOO) is a fashion brand famous for its trendy and innovative footwear, appealing to a young and style-conscious audience.
Why Do We Think SHOO Will Underperform?
- Muted 13.2% annual revenue growth over the last five years shows its demand lagged behind its consumer discretionary peers
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 7.8% for the last two years
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
At $43.11 per share, Steven Madden trades at 21.6x forward P/E. Read our free research report to see why you should think twice about including SHOO in your portfolio.
Texas Capital Bank (TCBI)
Rolling One-Year Beta: 1.05
Founded during the Texas banking renaissance of the 1990s with an entrepreneurial spirit, Texas Capital Bancshares (NASDAQ: TCBI) is a financial services firm that provides banking, wealth management, and investment banking services to businesses and individuals across Texas and beyond.
Why Do We Think Twice About TCBI?
- 2.1% annual net interest income growth over the last five years was slower than its banking peers
- Earnings growth underperformed the sector average over the last five years as its EPS grew by just 7.8% annually
- Low return on equity reflects management’s struggle to allocate funds effectively
Texas Capital Bank is trading at $94.02 per share, or 1.2x forward P/B. To fully understand why you should be careful with TCBI, check out our full research report (it’s free for active Edge members).
One Stock to Watch:
Roku (ROKU)
Rolling One-Year Beta: 2.44
With a name meaning six in Japanese because it was the founder's sixth company that he started, Roku (NASDAQ: ROKU) makes hardware players that offer access to various online streaming TV services.
Why Is ROKU Interesting?
- Total Hours Streamed have grown by 18.7% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Performance over the past three years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 51.2% outpaced its revenue gains
- Free cash flow margin grew by 14 percentage points over the last few years, giving the company more chips to play with
Roku’s stock price of $94.78 implies a valuation ratio of 27.3x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out 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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